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Should You Worry About JB Foods Limited's (SGX:BEW) CEO Pay Cheque?

Simply Wall St

How Tey has been the CEO of JB Foods Limited (SGX:BEW) since 2012. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for JB Foods

How Does How Tey's Compensation Compare With Similar Sized Companies?

Our data indicates that JB Foods Limited is worth S$196m, and total annual CEO compensation was reported as US$1.6m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$425k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We took a group of companies with market capitalizations below S$277m, and calculated the median CEO total compensation to be S$357k.

Thus we can conclude that How Tey receives more in total compensation than the median of a group of companies in the same market, and of similar size to JB Foods 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 JB Foods, below.

SGX:BEW CEO Compensation, October 4th 2019

Is JB Foods Limited Growing?

Over the last three years JB Foods Limited has grown its earnings per share (EPS) by an average of 56% per year (using a line of best fit). In the last year, its revenue is up 13%.

This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 JB Foods Limited Been A Good Investment?

I think that the total shareholder return of 170%, over three years, would leave most JB Foods Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

We compared the total CEO remuneration paid by JB Foods Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying JB Foods shares with their own money (free access).

If you want to buy a stock that is better than JB Foods, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.