Here's Why Shareholders May Want To Be Cautious With Increasing Matex International Limited's (Catalist:M15) CEO Pay Packet

editorial-team@simplywallst.com (Simply Wall St)

Sat, Apr 20, 2024, 6:15 PM 4 min read

Key Insights

Matex International will host its Annual General Meeting on 26th of April
CEO Alex Tan's total compensation includes salary of S$298.1k
Total compensation is 216% above industry average
Over the past three years, Matex International's EPS grew by 82% and over the past three years, the total loss to shareholders 32%

The underwhelming share price performance of Matex International Limited (Catalist:M15) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 26th of April. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Matex International

How Does Total Compensation For Alex Tan Compare With Other Companies In The Industry?

Our data indicates that Matex International Limited has a market capitalization of S$7.6m, and total annual CEO compensation was reported as S$309k for the year to December 2023. We note that's an increase of 23% above last year. In particular, the salary of S$298.1k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Singapore Chemicals industry with market capitalizations under S$272m, the reported median total CEO compensation was S$98k. Hence, we can conclude that Alex Tan is remunerated higher than the industry median. Furthermore, Alex Tan directly owns S$1.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	S$298k	S$239k	97%
Other	S$10k	S$11k	3%
Total Compensation	S$309k	S$251k	100%

On an industry level, around 75% of total compensation represents salary and 25% is other remuneration. Matex International is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation — Catalist:M15 CEO Compensation April 21st 2024

A Look at Matex International Limited's Growth Numbers

Matex International Limited's earnings per share (EPS) grew 82% per year over the last three years. In the last year, its revenue is down 50%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Matex International Limited Been A Good Investment?

The return of -32% over three years would not have pleased Matex International Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Alex receives almost all of their compensation through a salary. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Matex International (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Matex International, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.