Is Sheng Siong Group Ltd (SGX:OV8) Excessively Paying Its CEO?

Hock Lim is the CEO of Sheng Siong Group Ltd (SGX:OV8). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Sheng Siong Group

How Does Hock Lim’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Sheng Siong Group Ltd has a market cap of S$1.6b, and is paying total annual CEO compensation of S$3.2m. (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$363k. We looked at a group of companies with market capitalizations from S$1.4b to S$4.3b, and the median CEO compensation was S$450k.

As you can see, Hock Lim is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Sheng Siong Group Ltd is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Sheng Siong Group has changed over time.

SGX:OV8 CEO Compensation, March 10th 2019
SGX:OV8 CEO Compensation, March 10th 2019

Is Sheng Siong Group Ltd Growing?

Sheng Siong Group Ltd has increased its earnings per share (EPS) by an average of 7.7% a year, over the last three years (using a line of best fit). It achieved revenue growth of 7.4% over the last year.

I would argue that the improvement in revenue isn’t particularly impressive, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. It could be important to check this free visual depiction of what analysts expect for the future.

Has Sheng Siong Group Ltd Been A Good Investment?

Boasting a total shareholder return of 42% over three years, Sheng Siong Group Ltd has done well by shareholders. 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…

We examined the amount Sheng Siong Group Ltd pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Over the last three years returns to investors have been great, though we might have liked stronger business growth. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. Shareholders may want to check for free if Sheng Siong Group insiders are buying or selling shares.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.