We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Tai Sin Electric Limited's (SGX:500) CEO For Now

Key Insights

• Tai Sin Electric to hold its Annual General Meeting on 29th of October
• Total pay for CEO Bernard Lim includes S$493.7k salary
• The total compensation is 885% higher than the average for the industry
• Over the past three years, Tai Sin Electric's EPS fell by 5.5% and over the past three years, the total shareholder return was 18%

The share price of Tai Sin Electric Limited (SGX:500) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. The upcoming AGM on 29th of October may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Tai Sin Electric

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

At the time of writing, our data shows that Tai Sin Electric Limited has a market capitalization of S$184m, and reported total annual CEO compensation of S$1.1m for the year to June 2024. That's a notable increase of 11% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at S$494k.

For comparison, other companies in the Singapore Electrical industry with market capitalizations below S$263m, reported a median total CEO compensation of S$111k. Accordingly, our analysis reveals that Tai Sin Electric Limited pays Bernard Lim north of the industry median. Moreover, Bernard Lim also holds S$62m worth of Tai Sin Electric stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	S$494k	S$494k	45%
Other	S$603k	S$494k	55%
Total Compensation	S$1.1m	S$988k	100%

On an industry level, roughly 72% of total compensation represents salary and 28% is other remuneration. Tai Sin Electric pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Tai Sin Electric Limited's Growth Numbers

Tai Sin Electric Limited has reduced its earnings per share by 5.5% a year over the last three years. Its revenue is down 5.0% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. 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, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Tai Sin Electric Limited Been A Good Investment?

Tai Sin Electric Limited has generated a total shareholder return of 18% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Tai Sin Electric that you should be aware of before investing.

Switching gears from Tai Sin Electric, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.