Piyush Gupta became the CEO of DBS Group Holdings Ltd (SGX:D05) in 2009, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for DBS Group Holdings
Comparing DBS Group Holdings Ltd's CEO Compensation With the industry
Our data indicates that DBS Group Holdings Ltd has a market capitalization of S$54b, and total annual CEO compensation was reported as S$12m for the year to December 2019. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at S$1.2m.
For comparison, other companies in the industry with market capitalizations above S$11b, reported a median total CEO compensation of S$831k. Hence, we can conclude that Piyush Gupta is remunerated higher than the industry median.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | S$1.2m | S$1.2m | 10% |
| Other | S$11m | S$11m | 90% |
| Total Compensation | S$12m | S$12m | 100% |
Talking in terms of the industry, salary represented approximately 64% of total compensation out of all the companies we analyzed, while other remuneration made up 36% of the pie. DBS Group Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at DBS Group Holdings Ltd's Growth Numbers
DBS Group Holdings Ltd has seen its earnings per share (EPS) increase by 8.0% a year over the past three years. Its revenue is down 3.0% over the previous year.
We would prefer it if there was revenue growth, but the modest EPSgrowth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has DBS Group Holdings Ltd Been A Good Investment?
With a total shareholder return of 12% over three years, DBS Group Holdings Ltd shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
As we noted earlier, DBS Group Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the business isn't growing EPS, and the returns to shareholders haven't been wonderful. So while shareholders might not be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before thinking a bump in pay is in order.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which can't be ignored) in DBS Group Holdings we think you should know about.
Important note: DBS Group Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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. 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.
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