This Is Why We Think Singapore Technologies Engineering Ltd's (SGX:S63) CEO Might Get A Pay Rise Approved By Shareholders

Shareholders will be pleased by the robust performance of Singapore Technologies Engineering Ltd (SGX:S63) recently and this will be kept in mind in the upcoming AGM on 22 April 2021. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

See our latest analysis for Singapore Technologies Engineering

Comparing Singapore Technologies Engineering Ltd's CEO Compensation With the industry

Our data indicates that Singapore Technologies Engineering Ltd has a market capitalization of S$12b, and total annual CEO compensation was reported as S$3.7m for the year to December 2020. That's a notable decrease of 25% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at S$962k.

In comparison with other companies in the industry with market capitalizations ranging from S$5.3b to S$16b, the reported median CEO total compensation was S$5.9m. That is to say, Vincent Chong is paid under the industry median. What's more, Vincent Chong holds S$11m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	S$962k	S$1.0m	26%
Other	S$2.8m	S$4.0m	74%
Total Compensation	S$3.7m	S$5.0m	100%

On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. It's interesting to note that Singapore Technologies Engineering allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Singapore Technologies Engineering Ltd's Growth Numbers

Singapore Technologies Engineering Ltd has seen its earnings per share (EPS) increase by 1.2% a year over the past three years. In the last year, its revenue is down 9.0%.

We generally like to see a little revenue growth, but the modest EPS growth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Singapore Technologies Engineering Ltd Been A Good Investment?

Singapore Technologies Engineering Ltd has generated a total shareholder return of 23% 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.

In Summary...

The company's overall performance, while not bad, could be better. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Singapore Technologies Engineering that investors should be aware of in a dynamic business environment.

Switching gears from Singapore Technologies Engineering, 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.

When trading Singapore Technologies Engineering or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide 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 (at) simplywallst.com.