It Looks Like Serial System Ltd's (SGX:S69) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Serial System will host its Annual General Meeting on 30th of April
• CEO Derek Goh's total compensation includes salary of US$533.7k
• The total compensation is 216% higher than the average for the industry
• Serial System's three-year loss to shareholders was 44% while its EPS was down 102% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Serial System Ltd (SGX:S69) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 30th of April. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Serial System

How Does Total Compensation For Derek Goh Compare With Other Companies In The Industry?

According to our data, Serial System Ltd has a market capitalization of S$45m, and paid its CEO total annual compensation worth US$1.2m over the year to December 2023. That's a notable decrease of 33% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$534k.

On comparing similar-sized companies in the Singapore Electronic industry with market capitalizations below S$273m, we found that the median total CEO compensation was US$371k. Hence, we can conclude that Derek Goh is remunerated higher than the industry median. What's more, Derek Goh holds S$18m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$534k	US$532k	46%
Other	US$639k	US$1.2m	54%
Total Compensation	US$1.2m	US$1.8m	100%

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. It's interesting to note that Serial System allocates a smaller portion of compensation to salary in comparison 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.

Serial System Ltd's Growth

Over the last three years, Serial System Ltd has shrunk its earnings per share by 102% per year. In the last year, its revenue is down 16%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Serial System Ltd Been A Good Investment?

Few Serial System Ltd shareholders would feel satisfied with the return of -44% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Serial System you should be aware of, and 2 of them shouldn't be ignored.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.