Shareholders Will Probably Hold Off On Increasing VICOM Ltd's (SGX:WJP) CEO Compensation For The Time Being

Key Insights

• VICOM's Annual General Meeting to take place on 24th of April
• CEO Wing Yew Sim's total compensation includes salary of S$375.6k
• Total compensation is 383% above industry average
• VICOM's EPS grew by 4.1% over the past three years while total shareholder loss over the past three years was 30%

In the past three years, the share price of VICOM Ltd (SGX:WJP) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 24th of April could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for VICOM

Comparing VICOM Ltd's CEO Compensation With The Industry

According to our data, VICOM Ltd has a market capitalization of S$479m, and paid its CEO total annual compensation worth S$776k over the year to December 2023. Notably, that's an increase of 8.9% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at S$376k.

For comparison, other companies in the Singapore Commercial Services industry with market capitalizations ranging between S$273m and S$1.1b had a median total CEO compensation of S$160k. Accordingly, our analysis reveals that VICOM Ltd pays Wing Yew Sim north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	S$376k	S$343k	48%
Other	S$400k	S$370k	52%
Total Compensation	S$776k	S$712k	100%

On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. VICOM pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

VICOM Ltd's Growth

Over the past three years, VICOM Ltd has seen its earnings per share (EPS) grow by 4.1% per year. Its revenue is up 3.3% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has VICOM Ltd Been A Good Investment?

With a three year total loss of 30% for the shareholders, VICOM Ltd would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 identified 2 warning signs for VICOM (1 is potentially serious!) that you should be aware of before investing here.

Switching gears from VICOM, 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.