Shareholders May Not Be So Generous With DBS Group Holdings Ltd's (SGX:D05) CEO Compensation And Here's Why
CEO Piyush Gupta has done a decent job of delivering relatively good performance at DBS Group Holdings Ltd (SGX:D05) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 30 March 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.
View our latest analysis for DBS Group Holdings
How Does Total Compensation For Piyush Gupta Compare With Other Companies In The Industry?
At the time of writing, our data shows that DBS Group Holdings Ltd has a market capitalization of S$73b, and reported total annual CEO compensation of S$9.2m for the year to December 2020. Notably, that's a decrease of 24% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at S$1.2m.
On comparing similar companies in the industry with market capitalizations above S$11b, we found that the median total CEO compensation was S$905k. Accordingly, our analysis reveals that DBS Group Holdings Ltd pays Piyush Gupta north of the industry median. Moreover, Piyush Gupta also holds S$7.5m worth of DBS Group Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | S$1.2m | S$1.2m | 13% |
| Other | S$8.0m | S$11m | 87% |
| Total Compensation | S$9.2m | S$12m | 100% |
Speaking on an industry level, nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. DBS Group Holdings 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 DBS Group Holdings Ltd's Growth Numbers
Over the past three years, DBS Group Holdings Ltd has seen its earnings per share (EPS) grow by 2.4% per year. In the last year, its revenue is down 17%.
We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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?
DBS Group Holdings Ltd has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which shouldn'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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About SGX:D05
DBS Group Holdings
Provides commercial banking and financial services in Singapore, Hong Kong, rest of Greater China, South and Southeast Asia, and internationally.
Flawless balance sheet with proven track record and pays a dividend.
