How Much Is Tai Sin Electric Limited (SGX:500) Paying Its CEO?

This article will reflect on the compensation paid to Bernard Lim who has served as CEO of Tai Sin Electric Limited (SGX:500) since 2013. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Tai Sin Electric.

Check out our latest analysis for Tai Sin Electric

How Does Total Compensation For Bernard Lim Compare With Other Companies In The Industry?

According to our data, Tai Sin Electric Limited has a market capitalization of S$143m, and paid its CEO total annual compensation worth S$609k over the year to June 2020. Notably, that's a decrease of 21% over the year before. In particular, the salary of S$499.4k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below S$264m, reported a median total CEO compensation of S$123k. Accordingly, our analysis reveals that Tai Sin Electric Limited pays Bernard Lim north of the industry median. Furthermore, Bernard Lim directly owns S$23m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 90% of total compensation out of all the companies we analyzed, while other remuneration made up 10% of the pie. Although there is a difference in how total compensation is set, Tai Sin Electric more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Tai Sin Electric Limited's Growth

Over the last three years, Tai Sin Electric Limited has shrunk its earnings per share by 20% per year. Its revenue is down 18% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Tai Sin Electric Limited Been A Good Investment?

Since shareholders would have lost about 10% over three years, some Tai Sin Electric Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Bernard is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Tai Sin Electric you should be aware of, and 1 of them doesn't sit too well with us.

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. 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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