It Looks Like Federal International (2000) Ltd's (SGX:BDU) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Federal International (2000) will host its Annual General Meeting on 30th of April
• Total pay for CEO Kian Kiong Koh includes S$576.0k salary
• Total compensation is 802% above industry average
• Federal International (2000)'s EPS declined by 46% over the past three years while total shareholder loss over the past three years was 6.3%

The results at Federal International (2000) Ltd (SGX:BDU) have been quite disappointing recently and CEO Kian Kiong Koh bears some responsibility for this. At the upcoming AGM on 30th of April, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Federal International (2000)

How Does Total Compensation For Kian Kiong Koh Compare With Other Companies In The Industry?

According to our data, Federal International (2000) Ltd has a market capitalization of S$17m, and paid its CEO total annual compensation worth S$661k over the year to December 2023. That's a modest increase of 3.9% on the prior year. We note that the salary portion, which stands at S$576.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Singapore Trade Distributors industry with market capitalizations below S$272m, we found that the median total CEO compensation was S$73k. Accordingly, our analysis reveals that Federal International (2000) Ltd pays Kian Kiong Koh north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	S$576k	S$552k	87%
Other	S$85k	S$84k	13%
Total Compensation	S$661k	S$636k	100%

Talking in terms of the industry, salary represented approximately 93% of total compensation out of all the companies we analyzed, while other remuneration made up 7% of the pie. There isn't a significant difference between Federal International (2000) and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Federal International (2000) Ltd's Growth

Over the last three years, Federal International (2000) Ltd has shrunk its earnings per share by 46% per year. Its revenue is down 63% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Federal International (2000) Ltd Been A Good Investment?

Given the total shareholder loss of 6.3% over three years, many shareholders in Federal International (2000) Ltd are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Federal International (2000) (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.