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CosmoSteel Holdings Limited's (SGX:B9S) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

  • CosmoSteel Holdings' Annual General Meeting to take place on 29th of January

  • Total pay for CEO Jack Ong includes S$390.2k salary

  • The total compensation is similar to the average for the industry

  • Over the past three years, CosmoSteel Holdings' EPS fell by 16% and over the past three years, the total shareholder return was 43%

Under the guidance of CEO Jack Ong, CosmoSteel Holdings Limited (SGX:B9S) has performed reasonably well recently. As shareholders go into the upcoming AGM on 29th of January, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for CosmoSteel Holdings

How Does Total Compensation For Jack Ong Compare With Other Companies In The Industry?

According to our data, CosmoSteel Holdings Limited has a market capitalization of S$31m, and paid its CEO total annual compensation worth S$565k over the year to September 2023. Notably, that's an increase of 12% over the year before. In particular, the salary of S$390.2k, makes up a huge portion of the total compensation being paid to the CEO.

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In comparison with other companies in the Singapore Energy Services industry with market capitalizations under S$268m, the reported median total CEO compensation was S$794k. So it looks like CosmoSteel Holdings compensates Jack Ong in line with the median for the industry. What's more, Jack Ong holds S$4.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2023

2022

Proportion (2023)

Salary

S$390k

S$360k

69%

Other

S$174k

S$145k

31%

Total Compensation

S$565k

S$505k

100%

On an industry level, around 68% of total compensation represents salary and 32% is other remuneration. CosmoSteel Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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
SGX:B9S CEO Compensation January 22nd 2024

A Look at CosmoSteel Holdings Limited's Growth Numbers

CosmoSteel Holdings Limited has reduced its earnings per share by 16% a year over the last three years. Its revenue is up 81% over the last year.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has CosmoSteel Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 43% over three years, CosmoSteel Holdings Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. We reckon that there are some shareholders who may be hesitant to increase CEO pay further until EPS growth starts to improve, despite the robust revenue growth.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for CosmoSteel Holdings that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.