Should Shareholders Reconsider Union Gas Holdings Limited's (SGX:1F2) CEO Compensation Package?

Key Insights

• Union Gas Holdings to hold its Annual General Meeting on 29th of April
• Total pay for CEO Hark Piang Teo includes S$814.0k salary
• The total compensation is 1,132% higher than the average for the industry
• Union Gas Holdings' EPS declined by 6.0% over the past three years while total shareholder loss over the past three years was 56%

Our free stock report includes 3 warning signs investors should be aware of before investing in Union Gas Holdings. Read for free now.

Union Gas Holdings Limited (SGX:1F2) has not performed well recently and CEO Hark Piang Teo will probably need to up their game. At the upcoming AGM on 29th of April, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Union Gas Holdings

How Does Total Compensation For Hark Piang Teo Compare With Other Companies In The Industry?

According to our data, Union Gas Holdings Limited has a market capitalization of S$94m, and paid its CEO total annual compensation worth S$1.3m over the year to December 2024. This was the same amount the CEO received in the prior year. Notably, the salary which is S$814.0k, represents most of the total compensation being paid.

In comparison with other companies in the Singapore Gas Utilities industry with market capitalizations under S$262m, the reported median total CEO compensation was S$103k. This suggests that Hark Piang Teo is paid more than the median for the industry. What's more, Hark Piang Teo holds S$7.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2024	Proportion (2024)
Salary	S$814k	S$814k	64%
Other	S$460k	S$460k	36%
Total Compensation	S$1.3m	S$1.3m	100%

Talking in terms of the industry, salary represented approximately 74% of total compensation out of all the companies we analyzed, while other remuneration made up 26% of the pie. Union Gas Holdings pays a modest slice of remuneration through salary, as compared 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.

Union Gas Holdings Limited's Growth

Union Gas Holdings Limited has reduced its earnings per share by 6.0% a year over the last three years. It saw its revenue drop 2.6% over the last year.

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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Union Gas Holdings Limited Been A Good Investment?

The return of -56% over three years would not have pleased Union Gas Holdings Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Union Gas Holdings (1 is a bit concerning!) that you should be aware of before investing here.

Important note: Union Gas Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.