Soo Peng Lim is the CEO of Chemical Industries (Far East) Limited (SGX:C05). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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 Soo Peng Lim's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Chemical Industries (Far East) Limited has a market cap of S$55m, and reported total annual CEO compensation of S$1.3m for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at S$684k. We took a group of companies with market capitalizations below S$273m, and calculated the median CEO total compensation to be S$344k.
It would therefore appear that Chemical Industries (Far East) Limited pays Soo Peng Lim more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Chemical Industries (Far East) has changed over time.
Is Chemical Industries (Far East) Limited Growing?
Chemical Industries (Far East) Limited has increased its earnings per share (EPS) by an average of 10% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 12%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Chemical Industries (Far East) Limited Been A Good Investment?
Chemical Industries (Far East) Limited has generated a total shareholder return of 11% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared total CEO remuneration at Chemical Industries (Far East) Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Chemical Industries (Far East) (free visualization of insider trades).
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 email@example.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.
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