This article will reflect on the compensation paid to Paul Coutts who has served as CEO of Singapore Post Limited (SGX:S08) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for Singapore Post
Comparing Singapore Post Limited's CEO Compensation With the industry
Our data indicates that Singapore Post Limited has a market capitalization of S$1.7b, and total annual CEO compensation was reported as S$2.0m for the year to March 2020. That's a slight decrease of 4.5% on the prior year. In particular, the salary of S$1.00m, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar companies from the same industry with market caps ranging from S$1.4b to S$4.4b, we found that the median CEO total compensation was S$3.4m. This suggests that Paul Coutts is paid below the industry median.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | S$1.0m | S$1.0m | 51% |
| Other | S$975k | S$1.1m | 49% |
| Total Compensation | S$2.0m | S$2.1m | 100% |
On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. It's interesting to note that Singapore Post allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Singapore Post Limited's Growth
Singapore Post Limited has seen its earnings per share (EPS) increase by 67% a year over the past three years. In the last year, its revenue changed by just 0.9%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Singapore Post Limited Been A Good Investment?
With a three year total loss of 38% for the shareholders, Singapore Post Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As we touched on above, Singapore Post Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However we must not forget that the EPS growth has been very strong over three years. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when earnings are up. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any raise.
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. That's why we did some digging and identified 2 warning signs for Singapore Post that you should be aware of before investing.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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