How Much is Sheng Siong Group's (SGX:OV8) CEO Getting Paid?

Hock Chee Lim is the CEO of Sheng Siong Group Ltd (SGX:OV8), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Sheng Siong Group

Comparing Sheng Siong Group Ltd's CEO Compensation With the industry

According to our data, Sheng Siong Group Ltd has a market capitalization of S$2.3b, and paid its CEO total annual compensation worth S$3.5m over the year to December 2019. That's a notable increase of 9.3% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at S$372k.

On examining similar-sized companies in the industry with market capitalizations between S$1.3b and S$4.3b, we discovered that the median CEO total compensation of that group was S$3.0m. So it looks like Sheng Siong Group compensates Hock Chee Lim in line with the median for the industry. What's more, Hock Chee Lim holds S$212m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 90% of total compensation represents salary, while the remainder of 9.5% is other remuneration. Sheng Siong Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Sheng Siong Group Ltd's Growth Numbers

Over the past three years, Sheng Siong Group Ltd has seen its earnings per share (EPS) grow by 22% per year. Its revenue is up 37% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Sheng Siong Group Ltd Been A Good Investment?

We think that the total shareholder return of 84%, over three years, would leave most Sheng Siong Group Ltd shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As previously discussed, Hock Chee is compensated close to the median for companies of its size, and which belong to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for Sheng Siong Group (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Important note: Sheng Siong Group 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.

When trading Sheng Siong Group 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@simplywallst.com.