Shareholders May Not Be So Generous With Frasers Property Limited's (SGX:TQ5) CEO Compensation And Here's Why

In the past three years, the share price of Frasers Property Limited (SGX:TQ5) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 18 January 2023. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. 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 Frasers Property

Comparing Frasers Property Limited's CEO Compensation With The Industry

According to our data, Frasers Property Limited has a market capitalization of S$3.7b, and paid its CEO total annual compensation worth S$3.6m over the year to September 2022. Notably, that's an increase of 18% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at S$956k.

For comparison, other companies in the Singaporean Real Estate industry with market capitalizations ranging between S$2.7b and S$8.5b had a median total CEO compensation of S$795k. Hence, we can conclude that Panote Sirivadhanabhakdi is remunerated higher than the industry median.

Component	2022	2021	Proportion (2022)
Salary	S$956k	S$772k	26%
Other	S$2.7m	S$2.3m	74%
Total Compensation	S$3.6m	S$3.1m	100%

Speaking on an industry level, nearly 55% of total compensation represents salary, while the remainder of 45% is other remuneration. Frasers Property pays a modest slice of remuneration through salary, as compared 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.

A Look at Frasers Property Limited's Growth Numbers

Frasers Property Limited's earnings per share (EPS) grew 12% per year over the last three years. In the last year, its revenue is up 3.0%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Frasers Property Limited Been A Good Investment?

The return of -43% over three years would not have pleased Frasers Property Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Frasers Property (1 shouldn't be ignored!) that you should be aware of before investing here.

Important note: Frasers Property 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.