What Does Yongnam Holdings' (SGX:AXB) CEO Pay Reveal?

This article will reflect on the compensation paid to Soon Yong Seow who has served as CEO of Yongnam Holdings Limited (SGX:AXB) since 1994. This analysis will also assess whether Yongnam Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Yongnam Holdings

Comparing Yongnam Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that Yongnam Holdings Limited has a market capitalization of S$43m, and reported total annual CEO compensation of S$504k for the year to December 2019. Notably, that's a decrease of 11% over the year before. Notably, the salary which is S$463.7k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under S$267m, the reported median total CEO compensation was S$504k. This suggests that Yongnam Holdings remunerates its CEO largely in line with the industry average. What's more, Soon Yong Seow holds S$7.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. Although there is a difference in how total compensation is set, Yongnam Holdings 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.

Yongnam Holdings Limited's Growth

Yongnam Holdings Limited has reduced its earnings per share by 24% a year over the last three years. It saw its revenue drop 5.7% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Yongnam Holdings Limited Been A Good Investment?

With a three year total loss of 72% for the shareholders, Yongnam Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, Yongnam Holdings Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in Yongnam Holdings we think you should know about.

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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