Goh Yew Lin became the CEO of G. K. Goh Holdings Limited (SGX:G41) in 2008, 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.
How Does Total Compensation For Goh Yew Lin Compare With Other Companies In The Industry?
Our data indicates that G. K. Goh Holdings Limited has a market capitalization of S$239m, and total annual CEO compensation was reported as S$1.0m for the year to December 2019. That is, the compensation was roughly the same as last year. Notably, the salary which is S$969.0k, represents most of the total compensation being paid.
On examining similar-sized companies in the industry with market capitalizations between S$136m and S$545m, we discovered that the median CEO total compensation of that group was S$1.0m. From this we gather that Goh Yew Lin is paid around the median for CEOs in the industry.
Speaking on an industry level, nearly 83% of total compensation represents salary, while the remainder of 17% is other remuneration. It's interesting to note that G. K. Goh Holdings pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
G. K. Goh Holdings Limited's Growth
Over the last three years, G. K. Goh Holdings Limited has shrunk its earnings per share by 101% per year. In the last year, its revenue is up 13%.
Overall this is not a very positive result for shareholders. 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has G. K. Goh Holdings Limited Been A Good Investment?
Given the total shareholder loss of 19% over three years, many shareholders in G. K. Goh Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, G. K. Goh Holdings pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 2 which are significant) in G. K. Goh Holdings we think you should know about.
Important note: G. K. Goh Holdings 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.
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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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