AEM Holdings Ltd.'s (SGX:AWX) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• AEM Holdings to hold its Annual General Meeting on 24th of April
• CEO Chandran Nair's total compensation includes salary of S$520.7k
• The total compensation is 320% higher than the average for the industry
• AEM Holdings' three-year loss to shareholders was 38% while its EPS was down 30% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at AEM Holdings Ltd. (SGX:AWX) recently. At the upcoming AGM on 24th of April, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for AEM Holdings

Comparing AEM Holdings Ltd.'s CEO Compensation With The Industry

According to our data, AEM Holdings Ltd. has a market capitalization of S$727m, and paid its CEO total annual compensation worth S$1.0m over the year to December 2023. That's a notable decrease of 37% on last year. In particular, the salary of S$520.7k, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar companies from the Singapore Semiconductor industry with market caps ranging from S$273m to S$1.1b, we found that the median CEO total compensation was S$240k. Accordingly, our analysis reveals that AEM Holdings Ltd. pays Chandran Nair north of the industry median. Moreover, Chandran Nair also holds S$585k worth of AEM Holdings stock directly under their own name.

Talking in terms of the industry, salary represented approximately 68% of total compensation out of all the companies we analyzed, while other remuneration made up 32% of the pie. AEM Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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 AEM Holdings Ltd.'s Growth Numbers

AEM Holdings Ltd. has reduced its earnings per share by 30% a year over the last three years. In the last year, its revenue is down 45%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has AEM Holdings Ltd. Been A Good Investment?

The return of -38% over three years would not have pleased AEM Holdings Ltd. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling AEM Holdings (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.