We Think Some Shareholders May Hesitate To Increase Low Keng Huat (Singapore) Limited's (SGX:F1E) CEO Compensation

Key Insights

• Low Keng Huat (Singapore) will host its Annual General Meeting on 31st of May
• Salary of S$720.0k is part of CEO Marco Low's total remuneration
• Total compensation is similar to the industry average
• Low Keng Huat (Singapore)'s EPS declined by 91% over the past three years while total shareholder loss over the past three years was 33%

Shareholders of Low Keng Huat (Singapore) Limited (SGX:F1E) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also poor, despite revenues growing. The AGM coming up on 31st of May will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

See our latest analysis for Low Keng Huat (Singapore)

Comparing Low Keng Huat (Singapore) Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Low Keng Huat (Singapore) Limited has a market capitalization of S$218m, and reported total annual CEO compensation of S$1.0m for the year to January 2024. We note that's an increase of 8.1% above last year. Notably, the salary which is S$720.0k, represents most of the total compensation being paid.

On comparing similar companies from the Singaporean Real Estate industry with market caps ranging from S$135m to S$540m, we found that the median CEO total compensation was S$1.3m. This suggests that Low Keng Huat (Singapore) remunerates its CEO largely in line with the industry average. Furthermore, Marco Low directly owns S$1.5m worth of shares in the company.

Component	2024	2023	Proportion (2024)
Salary	S$720k	S$720k	69%
Other	S$321k	S$243k	31%
Total Compensation	S$1.0m	S$963k	100%

Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. Low Keng Huat (Singapore) pays out 69% of remuneration in the form of a salary, significantly higher than the industry average. 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 Low Keng Huat (Singapore) Limited's Growth Numbers

Low Keng Huat (Singapore) Limited has reduced its earnings per share by 91% a year over the last three years. Its revenue is up 278% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Low Keng Huat (Singapore) Limited Been A Good Investment?

Few Low Keng Huat (Singapore) Limited shareholders would feel satisfied with the return of -33% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. Shareholders will get the chance at the upcoming AGM 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. We identified 3 warning signs for Low Keng Huat (Singapore) (2 are a bit concerning!) that you should be aware of before investing here.

Important note: Low Keng Huat (Singapore) is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.