Is Yoma Strategic Holdings Ltd. (SGX:Z59) Overpaying Its CEO?

Melvyn Pun has been the CEO of Yoma Strategic Holdings Ltd. (SGX:Z59) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Yoma Strategic Holdings

How Does Melvyn Pun's Compensation Compare With Similar Sized Companies?

Our data indicates that Yoma Strategic Holdings Ltd. is worth S$469m, and total annual CEO compensation was reported as S$597k for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at S$537k. When we examined a selection of companies with market caps ranging from S$283m to S$1.1b, we found the median CEO total compensation was S$947k.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 69% of total compensation out of all the companies we analysed, while other remuneration made up 31% of the pie. It's interesting to note that Yoma Strategic Holdings pays out a greater portion of remuneration through salary, in comparison to the wider industry.

Most shareholders would consider it a positive that Melvyn Pun takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see a visual representation of the CEO compensation at Yoma Strategic Holdings, below.

Is Yoma Strategic Holdings Ltd. Growing?

On average over the last three years, Yoma Strategic Holdings Ltd. has shrunk earnings per share by 43% each year (measured with a line of best fit). Its revenue is up 9.9% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.

Has Yoma Strategic Holdings Ltd. Been A Good Investment?

Since shareholders would have lost about 62% over three years, some Yoma Strategic Holdings Ltd. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

It appears that Yoma Strategic Holdings Ltd. remunerates its CEO below most similar sized companies.

The compensation paid to Melvyn Pun is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. On another note, Yoma Strategic Holdings has 3 warning signs (and 1 which is potentially serious) we think you should know about.

Important note: Yoma Strategic Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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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