Here's Why Singapore Technologies Engineering Ltd's (SGX:S63) CEO May Have Their Pay Bumped Up

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

Sat, Apr 20, 2024, 6:04 PM 4 min read

Singapore Technologies Engineering to hold its Annual General Meeting on 26th of April
Total pay for CEO Vincent Chong includes S$1.17m salary
The overall pay is 47% below the industry average
Singapore Technologies Engineering's total shareholder return over the past three years was 12% while its EPS grew by 3.9% over the past three years

Shareholders will probably not be disappointed by the robust results at Singapore Technologies Engineering Ltd (SGX:S63) recently and they will be keeping this in mind as they go into the AGM on 26th of April. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

Check out our latest analysis for Singapore Technologies Engineering

Comparing Singapore Technologies Engineering Ltd's CEO Compensation With The Industry

At the time of writing, our data shows that Singapore Technologies Engineering Ltd has a market capitalization of S$12b, and reported total annual CEO compensation of S$3.9m for the year to December 2023. That's a notable decrease of 26% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at S$1.2m.

On examining similar-sized companies in the Singapore Aerospace & Defense industry with market capitalizations between S$5.4b and S$16b, we discovered that the median CEO total compensation of that group was S$7.4m. That is to say, Vincent Chong is paid under the industry median. Furthermore, Vincent Chong directly owns S$18m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	S$1.2m	S$1.1m	30%
Other	S$2.8m	S$4.3m	70%
Total Compensation	S$3.9m	S$5.4m	100%

On an industry level, roughly 83% of total compensation represents salary and 17% is other remuneration. In Singapore Technologies Engineering's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation — SGX:S63 CEO Compensation April 21st 2024

A Look at Singapore Technologies Engineering Ltd's Growth Numbers

Singapore Technologies Engineering Ltd's earnings per share (EPS) grew 3.9% per year over the last three years. Its revenue is up 12% over the last year.

We would argue that the modest growth in revenue is a notable positive. And, while modest, the EPS growth is noticeable. So while performance isn't amazing, we think it really does seem quite respectable. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Singapore Technologies Engineering Ltd Been A Good Investment?

With a total shareholder return of 12% over three years, Singapore Technologies Engineering Ltd shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Singapore Technologies Engineering that investors should look into moving forward.

Important note: Singapore Technologies Engineering is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.