Shareholders May Not Be So Generous With City Developments Limited's (SGX:C09) CEO Compensation And Here's Why

Key Insights

• City Developments will host its Annual General Meeting on 24th of April
• Salary of S$986.0k is part of CEO Sherman Kwek's total remuneration
• The overall pay is 316% above the industry average
• City Developments' EPS grew by 92% over the past three years while total shareholder loss over the past three years was 21%

Shareholders of City Developments Limited (SGX:C09) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 24th of April could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for City Developments

Comparing City Developments Limited's CEO Compensation With The Industry

At the time of writing, our data shows that City Developments Limited has a market capitalization of S$5.1b, and reported total annual CEO compensation of S$3.5m for the year to December 2023. Notably, that's a decrease of 9.1% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at S$986k.

In comparison with other companies in the Singaporean Real Estate industry with market capitalizations ranging from S$2.7b to S$8.7b, the reported median CEO total compensation was S$844k. Hence, we can conclude that Sherman Kwek is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	S$986k	S$776k	28%
Other	S$2.5m	S$3.1m	72%
Total Compensation	S$3.5m	S$3.9m	100%

On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. City Developments pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at City Developments Limited's Growth Numbers

Over the past three years, City Developments Limited has seen its earnings per share (EPS) grow by 92% per year. It achieved revenue growth of 50% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has City Developments Limited Been A Good Investment?

With a three year total loss of 21% for the shareholders, City Developments Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for City Developments (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.