We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Haw Par Corporation Limited's (SGX:H02) CEO For Now

Key Insights

• Haw Par's Annual General Meeting to take place on 23rd of April
• Total pay for CEO Ee Lim Wee includes S$1.27m salary
• The total compensation is 870% higher than the average for the industry
• Haw Par's EPS grew by 22% over the past three years while total shareholder loss over the past three years was 22%

In the past three years, the share price of Haw Par Corporation Limited (SGX:H02) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 23rd of April could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Haw Par

Comparing Haw Par Corporation Limited's CEO Compensation With The Industry

Our data indicates that Haw Par Corporation Limited has a market capitalization of S$2.2b, and total annual CEO compensation was reported as S$3.3m for the year to December 2023. Notably, that's an increase of 37% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at S$1.3m.

On comparing similar companies from the Singapore Pharmaceuticals industry with market caps ranging from S$1.4b to S$4.4b, we found that the median CEO total compensation was S$344k. Accordingly, our analysis reveals that Haw Par Corporation Limited pays Ee Lim Wee north of the industry median. What's more, Ee Lim Wee holds S$4.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	S$1.3m	S$1.2m	38%
Other	S$2.1m	S$1.2m	62%
Total Compensation	S$3.3m	S$2.4m	100%

Talking in terms of the industry, salary represented approximately 73% of total compensation out of all the companies we analyzed, while other remuneration made up 27% of the pie. It's interesting to note that Haw Par allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Haw Par Corporation Limited's Growth

Over the past three years, Haw Par Corporation Limited has seen its earnings per share (EPS) grow by 22% per year. Its revenue is up 27% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Haw Par Corporation Limited Been A Good Investment?

Given the total shareholder loss of 22% over three years, many shareholders in Haw Par Corporation Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Haw Par (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.