How Much is SATS' (SGX:S58) CEO Getting Paid?

Alex Hungate has been the CEO of SATS Ltd. (SGX:S58) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. 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 SATS

Comparing SATS Ltd.'s CEO Compensation With the industry

According to our data, SATS Ltd. has a market capitalization of S$4.7b, and paid its CEO total annual compensation worth S$3.0m over the year to March 2020. That's a notable decrease of 12% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at S$1.1m.

On examining similar-sized companies in the industry with market capitalizations between S$2.7b and S$8.5b, we discovered that the median CEO total compensation of that group was S$276k. Hence, we can conclude that Alex Hungate is remunerated higher than the industry median. What's more, Alex Hungate holds S$15m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 80% of total compensation represents salary, while the remainder of 20% is other remuneration. SATS pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at SATS Ltd.'s Growth Numbers

Over the last three years, SATS Ltd. has shrunk its earnings per share by 33% per year. In the last year, its revenue is down 25%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has SATS Ltd. Been A Good Investment?

Given the total shareholder loss of 14% over three years, many shareholders in SATS Ltd. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, SATS Ltd. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good against shareholder returns, which have been negative for the past three years. To make matters worse, EPS growth has also been negative during this period. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for SATS you should be aware of, and 1 of them is potentially serious.

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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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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