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Is SIA Engineering Company Limited’s (SGX:S59) CEO Pay Justified?

In 2015 Kim Chiang Png was appointed CEO of SIA Engineering Company Limited (SGX:S59). 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for SIA Engineering

How Does Kim Chiang Png’s Compensation Compare With Similar Sized Companies?

Our data indicates that SIA Engineering Company Limited is worth S$2.8b, and total annual CEO compensation is S$2.0m. (This is based on the year to 2018). We think total compensation is more important but we note that the CEO salary is lower, at S$633k. We looked at a group of companies with market capitalizations from S$1.4b to S$4.4b, and the median CEO compensation was S$876k.

Thus we can conclude that Kim Chiang Png receives more in total compensation than the median of a group of companies in the same market, and of similar size to SIA Engineering Company Limited. However, this doesn’t necessarily mean the pay is too high. 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 SIA Engineering, below.

SGX:S59 CEO Compensation November 26th 18

Is SIA Engineering Company Limited Growing?

SIA Engineering Company Limited has reduced its earnings per share by an average of 7.3% a year, over the last three years. In the last year, its revenue is down -5.3%.

Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. 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 SIA Engineering Company Limited Been A Good Investment?

Given the total loss of 21% over three years, many shareholders in SIA Engineering Company 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 SIA Engineering Company Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling SIA Engineering shares (free trial).

Or you might prefer examine intently this intuitive graph showing past earnings 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.