Should You Worry About Chemical Industries (Far East) Limited's (SGX:C05) CEO Salary Level?
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Soo Lim is the CEO of Chemical Industries (Far East) Limited (SGX:C05). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Chemical Industries (Far East)
How Does Soo 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$54m, and is paying total annual CEO compensation of S$1.5m. (This figure is for the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at S$684k. We examined a group of similar sized companies, with market capitalizations of below S$273m. The median CEO total compensation in that group is S$272k.
It would therefore appear that Chemical Industries (Far East) Limited pays Soo 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. 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 Chemical Industries (Far East), below.
Is Chemical Industries (Far East) Limited Growing?
Chemical Industries (Far East) Limited has reduced its earnings per share by an average of 12% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 9.9% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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?
Boasting a total shareholder return of 79% over three years, Chemical Industries (Far East) Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
We compared the total CEO remuneration paid by Chemical Industries (Far East) Limited, and compared it to remuneration at a group of 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.
However, we can't argue with the strong returns to shareholders, over the same time period. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. So you may want to check if insiders are buying Chemical Industries (Far East) shares with their own money (free access).
Important note: Chemical Industries (Far East) 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.
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.
