Should You Worry About Singapore Telecommunications Limited's (SGX:Z74) CEO Pay?

In 2007 Sock Koong Chua was appointed CEO of Singapore Telecommunications Limited (SGX:Z74). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Singapore Telecommunications

How Does Sock Koong Chua's Compensation Compare With Similar Sized Companies?

Our data indicates that Singapore Telecommunications Limited is worth S$49b, and total annual CEO compensation was reported as S$3.5m for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at S$1.6m. We took a group of companies with market capitalizations over S$11b, and calculated the median CEO total compensation to be S$5.7m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

Most shareholders would consider it a positive that Sock Koong Chua takes less in total compensation than the CEOs of most other large companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see, below, how CEO compensation at Singapore Telecommunications has changed over time.

Is Singapore Telecommunications Limited Growing?

Over the last three years Singapore Telecommunications Limited has shrunk its earnings per share by an average of 28% per year (measured with a line of best fit). It saw its revenue drop 1.8% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Singapore Telecommunications Limited Been A Good Investment?

Given the total loss of 12% over three years, many shareholders in Singapore Telecommunications Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Singapore Telecommunications Limited is currently paying its CEO below what is normal for large companies.

The compensation paid to Sock Koong Chua is lower than is usual at larger 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. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Singapore Telecommunications.

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.

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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