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Is Mun Siong Engineering Limited's (SGX:MF6) CEO Pay Justified?

Simply Wall St

The CEO of Mun Siong Engineering Limited (SGX:MF6) is Woei Fen Cheng. First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Mun Siong Engineering

How Does Woei Fen Cheng's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Mun Siong Engineering Limited has a market cap of S$28m, and reported total annual CEO compensation of S$232k for the year to December 2018. Notably, the salary of S$223k is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below S$269m. The median CEO total compensation in that group is S$465k.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.

You can see a visual representation of the CEO compensation at Mun Siong Engineering, below.

SGX:MF6 CEO Compensation, January 15th 2020

Is Mun Siong Engineering Limited Growing?

Over the last three years Mun Siong Engineering Limited has shrunk its earnings per share by an average of 102% per year (measured with a line of best fit). In the last year, its revenue is down 12%.

Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Mun Siong Engineering Limited Been A Good Investment?

Since shareholders would have lost about 20% over three years, some Mun Siong Engineering Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Mun Siong Engineering Limited is currently paying its CEO below what is normal for companies of its size.

The compensation paid to Woei Fen Cheng is lower than is usual at similar sized 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. Shareholders may want to check for free if Mun Siong Engineering insiders are buying or selling shares.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.