Ee Cheong Wee became the CEO of United Overseas Bank Limited (SGX:U11) in 2007. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Ee Cheong Wee's Compensation Compare With Similar Sized Companies?
Our data indicates that United Overseas Bank Limited is worth S$44b, and total annual CEO compensation is S$9.4m. (This number is for the twelve months until December 2017). We think total compensation is more important but we note that the CEO salary is lower, at S$1.2m. We looked at a group of companies with market capitalizations over S$11b and the median CEO total compensation was S$6.1m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
Thus we can conclude that Ee Cheong Wee receives more in total compensation than the median of a group of large companies in the same market as United Overseas Bank Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at United Overseas Bank, below.
Is United Overseas Bank Limited Growing?
Over the last three years United Overseas Bank Limited has grown its earnings per share (EPS) by an average of 7.1% per year (using a line of best fit). In the last year, its revenue is up 11%.
This revenue growth could really point to a brighter future. And, while modest, the earnings per share growth is noticeable. So while performance isn't amazing, we think it really does seem quite respectable. Shareholders might be interested in this free visualization of analyst forecasts.
Has United Overseas Bank Limited Been A Good Investment?
Boasting a total shareholder return of 50% over three years, United Overseas Bank Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by United Overseas Bank Limited, and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.
One might like to have seen stronger growth, but shareholder returns have been pleasing, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying United Overseas Bank shares with their own money (free access).
Important note: United Overseas Bank may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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