We Think Azeus Systems Holdings Ltd.'s (SGX:BBW) CEO Compensation Looks Fair

The performance at Azeus Systems Holdings Ltd. (SGX:BBW) has been quite strong recently and CEO Wan Lik Lee has played a role in it. Coming up to the next AGM on 12 July 2021, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for Azeus Systems Holdings

Comparing Azeus Systems Holdings Ltd.'s CEO Compensation With the industry

According to our data, Azeus Systems Holdings Ltd. has a market capitalization of S$61m, and paid its CEO total annual compensation worth HK$618k over the year to March 2021. This was the same as last year. We note that the salary portion, which stands at HK$600.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below S$270m, reported a median total CEO compensation of HK$607k. This suggests that Azeus Systems Holdings remunerates its CEO largely in line with the industry average. What's more, Wan Lik Lee holds S$16m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	HK$600k	HK$600k	97%
Other	HK$18k	HK$18k	3%
Total Compensation	HK$618k	HK$618k	100%

On an industry level, around 88% of total compensation represents salary and 12% is other remuneration. Investors will find it interesting that Azeus Systems Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Azeus Systems Holdings Ltd.'s Growth

Azeus Systems Holdings Ltd. has seen its earnings per share (EPS) increase by 133% a year over the past three years. Its revenue is down 1.7% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Azeus Systems Holdings Ltd. Been A Good Investment?

We think that the total shareholder return of 807%, over three years, would leave most Azeus Systems Holdings Ltd. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Wan Lik receives almost all of their compensation through a salary. Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Azeus Systems Holdings that investors should look into moving forward.

Important note: Azeus Systems Holdings 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. 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.
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