Is Willas-Array Electronics (Holdings) Limited’s (SGX:BDR) CEO Pay Justified?

Alvin Hon has been the CEO of Willas-Array Electronics (Holdings) Limited (SGX:BDR) since 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Willas-Array Electronics (Holdings)

How Does Alvin Hon’s Compensation Compare With Similar Sized Companies?

According to our data, Willas-Array Electronics (Holdings) Limited has a market capitalization of S$33m, and paid its CEO total annual compensation worth HK$2.0m over the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at HK$1.7m. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO total compensation was HK$2.6m.

So Alvin Hon receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Willas-Array Electronics (Holdings) has changed from year to year.

SGX:BDR CEO Compensation, February 26th 2020
SGX:BDR CEO Compensation, February 26th 2020

Is Willas-Array Electronics (Holdings) Limited Growing?

Willas-Array Electronics (Holdings) Limited has reduced its earnings per share by an average of 74% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 22%.

Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don’t have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Willas-Array Electronics (Holdings) Limited Been A Good Investment?

With a three year total loss of 9.9%, Willas-Array Electronics (Holdings) Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

Remuneration for Alvin Hon is close enough to the median pay for a CEO of a similar sized company .

Returns have been disappointing and the company is not growing its earnings per share. Few would argue that it’s wise for the company to pay any more, before returns improve. Whatever your view on compensation, you might want to check if insiders are buying or selling Willas-Array Electronics (Holdings) shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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