What Can We Make Of Soup Restaurant Group's (SGX:5KI) CEO Compensation?

This article will reflect on the compensation paid to Wei Teck Wong who has served as CEO of Soup Restaurant Group Limited (SGX:5KI) since 2016. This analysis will also assess whether Soup Restaurant Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Soup Restaurant Group

How Does Total Compensation For Wei Teck Wong Compare With Other Companies In The Industry?

At the time of writing, our data shows that Soup Restaurant Group Limited has a market capitalization of S$25m, and reported total annual CEO compensation of S$338k for the year to December 2019. That's a notable decrease of 24% on last year. We note that the salary portion, which stands at S$334.6k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under S$266m, the reported median total CEO compensation was S$171k. This suggests that Wei Teck Wong is paid more than the median for the industry. What's more, Wei Teck Wong holds S$3.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 67% of total compensation out of all the companies we analyzed, while other remuneration made up 33% of the pie. Investors will find it interesting that Soup Restaurant Group pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Soup Restaurant Group Limited's Growth Numbers

Over the last three years, Soup Restaurant Group Limited has shrunk its earnings per share by 43% per year. It saw its revenue drop 16% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Soup Restaurant Group Limited Been A Good Investment?

Since shareholders would have lost about 28% over three years, some Soup Restaurant Group Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Soup Restaurant Group pays its CEO a majority of compensation through a salary. As we touched on above, Soup Restaurant Group Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 4 warning signs for Soup Restaurant Group that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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