What CEOs are paid -- especially when the amounts are viewed as being excessive in some quarters -- always makes an interesting topic of conversation for market participants.
UOB KH's report authored by Adrian Loh & team yesterday contained various ways to gauge if CEOS are fairly or overly paid.
In one conclusion, the analysts said that based on their respective 2022 net profits, the Singapore-listed companies that “generated the most value” out of their CEOs were:
• Yangzijiang Shipbuilding (YZJ),
• Singaopre Telecommunications (SingTel) and
• Singapore Airlines (SIA) .
Here are some other findings:
• With a 2022 compensation of S$78,000 -- yes, just S$78,000 plus some loose change -- YZJ’s CEO, Ren Letian, was the lowest paid on an absolute basis. The sum is significantly lower than the average CEO pay of S$3.6m within UOB KH's coverage universe. Ren Letian also wears the hat of executive chairman in this company, so he does look underpaid. Unlike small businesses where CEOs sometimes double up as chairman, YZJ is big -- it's a S$5 billion company with global clients for the big ships it makes. • Notably, YZJ's 2022 net profit (RMB2.8 billion, or S$524 million) was over 7000x higher than his pay. • YZJ’s top three management (excluding CEO) was paid less than S$400,000 in total, while the total compensation of its board of directors was less than S$300,000. • CEO Ren, who owns a chunk of shares in the company, received around S$8.3m in dividends from the company in 2022. (YZJ's dividend has been stable at 4.5 - 5 cents a share in the past 5 years). |
| Most overpaid CEOs? |
According to UOB KH's report, the most overpaid CEOs, relative to their companies’ 2022 share price performance, were from UMS Holdings (Andy Luong) and Rex International (Mans Lidgren).
Their pay was S$7.4m and S$4.1m, respectively, while their share prices declined by 19% and 28%.
UMS saw an 85% yoy increase in its 2022 NPAT while Rex’s fell 99.5%.
Sheng Siong CEO Lim Hock Chee's pay was S$5.8m while its share price rose 18% in 2022 and it generated an ROE of 29.1%, which was 9-10ppt higher than that of UMS and Rex.
UOB KH noted that Rex’s board is one of the highest paid at S$5.1m.
This has attracted the attention of a corporate governance expert at the National University of Singapore who questioned its payment of performance bonuses to its non-executive directors.
Full report here.
