Does First Resources Limited's (SGX:EB5) CEO Pay Matter?

In 2003, Ciliandra Fangiono was appointed CEO of First Resources Limited (SGX:EB5). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for First Resources

How Does Ciliandra Fangiono's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that First Resources Limited has a market cap of S$1.9b, and reported total annual CEO compensation of S$1.4m for the year to December 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at S$858k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of S$1.4b to S$4.6b. The median total CEO compensation was S$2.2m.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 29% of total compensation represents salary and 71% is other remuneration. First Resources pays out 61% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.

At first glance this seems like a real positive for shareholders, since Ciliandra Fangiono is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business. The graphic below shows how CEO compensation at First Resources has changed from year to year.

Is First Resources Limited Growing?

Over the last three years First Resources Limited has shrunk its earnings per share by an average of 21% per year (measured with a line of best fit). In the last year, its revenue is down 2.9%.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has First Resources Limited Been A Good Investment?

Given the total loss of 30% over three years, many shareholders in First Resources Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

It appears that First Resources Limited remunerates its CEO below most similar sized companies.

Ciliandra Fangiono is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. Moving away from CEO compensation for the moment, we've identified 1 warning sign for First Resources that you should be aware of before investing.

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

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.

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