Is Singapore Airlines Limited (SGX:C6L) Overpaying Its CEO?

In 2011 Choon Phong Goh was appointed CEO of Singapore Airlines Limited (SGX:C6L). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Singapore Airlines

Want to participate in a short research study? Help shape the future of investing tools and receive a $60 prize!

How Does Choon Phong Goh’s Compensation Compare With Similar Sized Companies?

According to our data, Singapore Airlines Limited has a market capitalization of S$11b, and pays its CEO total annual compensation worth S$5.0m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at S$1.3m. We examined companies with market caps from S$5.4b to S$16b, and discovered that the median CEO compensation of that group was S$3.8m.

As you can see, Choon Phong Goh is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Singapore Airlines Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Singapore Airlines, below.

SGX:C6L CEO Compensation January 31st 19
SGX:C6L CEO Compensation January 31st 19

Is Singapore Airlines Limited Growing?

Over the last three years Singapore Airlines Limited has shrunk its earnings per share by an average of 3.7% per year. Its revenue is up 4.8% over last year.

Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.

Shareholders might be interested in this free visualization of analyst forecasts. .

Has Singapore Airlines Limited Been A Good Investment?

Given the total loss of 1.8% over three years, many shareholders in Singapore Airlines Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We examined the amount Singapore Airlines Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Singapore Airlines shares (free trial).

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.