How Much Did InnoTek's (SGX:M14) CEO Pocket Last Year?

This article will reflect on the compensation paid to Yiliang Lou who has served as CEO of InnoTek Limited (SGX:M14) since 2017. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for InnoTek.

View our latest analysis for InnoTek

How Does Total Compensation For Yiliang Lou Compare With Other Companies In The Industry?

According to our data, InnoTek Limited has a market capitalization of S$124m, and paid its CEO total annual compensation worth S$872k over the year to December 2019. Notably, that's an increase of 40% over the year before. Notably, the salary which is S$488.5k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below S$267m, we found that the median total CEO compensation was S$122k. This suggests that Yiliang Lou is paid more than the median for the industry. Furthermore, Yiliang Lou directly owns S$7.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 64% of total compensation represents salary, while the remainder of 36% is other remuneration. It's interesting to note that InnoTek allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

InnoTek Limited's Growth

Earnings per share at InnoTek Limited are much the same as they were three years ago, albeit slightly lower. Its revenue is down 15% over the previous year.

Its a bit disappointing to see that the company has failed to grow its EPS. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 InnoTek Limited Been A Good Investment?

We think that the total shareholder return of 65%, over three years, would leave most InnoTek Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As previously discussed, Yiliang is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. We feel that EPS have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. Considering positive investor returns, it would be bold of us to criticize CEO compensation, but shareholders might want to see healthier EPS growth before a raise is given out.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for InnoTek that investors should look into moving forward.

Important note: InnoTek 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.

If you decide to trade InnoTek, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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