Does Sarine Technologies' (SGX:U77) CEO Salary Compare Well With Industry Peers?

David Block became the CEO of Sarine Technologies Ltd. (SGX:U77) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Sarine Technologies

Comparing Sarine Technologies Ltd.'s CEO Compensation With the industry

Our data indicates that Sarine Technologies Ltd. has a market capitalization of S$126m, and total annual CEO compensation was reported as S$475k for the year to December 2019. We note that's an increase of 19% above last year. We note that the salary portion, which stands at US$304.1k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below S$269m, we found that the median total CEO compensation was S$122k. Accordingly, our analysis reveals that Sarine Technologies Ltd. pays David Block north of the industry median.

Talking in terms of the industry, salary represented approximately 64% of total compensation out of all the companies we analyzed, while other remuneration made up 36% of the pie. Sarine Technologies is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Sarine Technologies Ltd.'s Growth Numbers

Sarine Technologies Ltd. has reduced its earnings per share by 44% a year over the last three years. In the last year, its revenue is up 10%.

The decline in EPS is a bit concerning. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Sarine Technologies Ltd. Been A Good Investment?

Given the total shareholder loss of 59% over three years, many shareholders in Sarine Technologies Ltd. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, David is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. To make matters worse, EPS growth has also been negative during this period. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which can't be ignored) in Sarine Technologies we think you should know about.

Switching gears from Sarine Technologies, 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. 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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