We Think Shareholders May Want To Consider A Review Of China Aviation Oil (Singapore) Corporation Ltd's (SGX:G92) CEO Compensation Package

China Aviation Oil (Singapore) Corporation Ltd (SGX:G92) has not performed well recently and CEO Yanjun Wang will probably need to up their game. At the upcoming AGM on 28 April 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for China Aviation Oil (Singapore)

Comparing China Aviation Oil (Singapore) Corporation Ltd's CEO Compensation With the industry

According to our data, China Aviation Oil (Singapore) Corporation Ltd has a market capitalization of S$989m, and paid its CEO total annual compensation worth US$243k over the year to December 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at US$176.0k constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between S$532m and S$2.1b, we discovered that the median CEO total compensation of that group was US$142k. Hence, we can conclude that Yanjun Wang is remunerated higher than the industry median.

Component	2020	2019	Proportion (2020)
Salary	US$176k	US$173k	72%
Other	US$67k	US$66k	28%
Total Compensation	US$243k	US$239k	100%

Talking in terms of the industry, salary represented approximately 81% of total compensation out of all the companies we analyzed, while other remuneration made up 19% of the pie. It's interesting to note that China Aviation Oil (Singapore) allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at China Aviation Oil (Singapore) Corporation Ltd's Growth Numbers

China Aviation Oil (Singapore) Corporation Ltd has reduced its earnings per share by 13% a year over the last three years. In the last year, its revenue is down 48%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 China Aviation Oil (Singapore) Corporation Ltd Been A Good Investment?

Given the total shareholder loss of 21% over three years, many shareholders in China Aviation Oil (Singapore) Corporation Ltd are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which is concerning) in China Aviation Oil (Singapore) we think you should know about.

Switching gears from China Aviation Oil (Singapore), 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.

When trading China Aviation Oil (Singapore) 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 (at) simplywallst.com.