Is G. K. Goh Holdings Limited's (SGX:G41) CEO Being Overpaid?

By
Simply Wall St
Published
April 25, 2019
SGX:G41

In 2008 Goh Yew Lin was appointed CEO of G. K. Goh Holdings Limited (SGX:G41). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for G. K. Goh Holdings

How Does Goh Yew Lin's Compensation Compare With Similar Sized Companies?

According to our data, G. K. Goh Holdings Limited has a market capitalization of S$283m, and pays its CEO total annual compensation worth S$5.8m. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at S$849k. We looked at a group of companies with market capitalizations from S$136m to S$543m, and the median CEO total compensation was S$439k.

As you can see, Goh Yew Lin is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean G. K. Goh Holdings Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at G. K. Goh Holdings has changed over time.

SGX:G41 CEO Compensation, April 25th 2019
SGX:G41 CEO Compensation, April 25th 2019

Is G. K. Goh Holdings Limited Growing?

Over the last three years G. K. Goh Holdings Limited has shrunk its earnings per share by an average of 11% per year (measured with a line of best fit). Its revenue is down -16% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has G. K. Goh Holdings Limited Been A Good Investment?

G. K. Goh Holdings Limited has served shareholders reasonably well, with a total return of 17% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

We compared total CEO remuneration at G. K. Goh Holdings Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

And while shareholder returns have been respectable, they have hardly been superb. So we doubt many shareholders would consider the CEO pay to be particularly modest! Whatever your view on compensation, you might want to check if insiders are buying or selling G. K. Goh Holdings shares (free trial).

Important note: G. K. Goh Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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