Key Insights

• Sembcorp Industries to hold its Annual General Meeting on 23rd of April
• CEO Kim Yin Wong's total compensation includes salary of S$1.37m
• The total compensation is 396% higher than the average for the industry
• Sembcorp Industries' EPS grew by 94% over the past three years while total shareholder return over the past three years was 155%

CEO Kim Yin Wong has done a decent job of delivering relatively good performance at Sembcorp Industries Ltd (SGX:U96) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 23rd of April. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Comparing Sembcorp Industries Ltd's CEO Compensation With The Industry

Our data indicates that Sembcorp Industries Ltd has a market capitalization of S$9.3b, and total annual CEO compensation was reported as S$7.9m for the year to December 2023. We note that's an increase of 34% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at S$1.4m.

For comparison, other companies in the Singapore Integrated Utilities industry with market capitalizations ranging between S$5.5b and S$16b had a median total CEO compensation of S$1.6m. Accordingly, our analysis reveals that Sembcorp Industries Ltd pays Kim Yin Wong north of the industry median. Moreover, Kim Yin Wong also holds S$26m worth of Sembcorp Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. There isn't a significant difference between Sembcorp Industries and the broader market, in terms of salary allocation in the overall compensation package. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Sembcorp Industries Ltd's Growth

Sembcorp Industries Ltd's earnings per share (EPS) grew 94% per year over the last three years. Its revenue is down 10% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Sembcorp Industries Ltd Been A Good Investment?

We think that the total shareholder return of 155%, over three years, would leave most Sembcorp Industries Ltd shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which is concerning) in Sembcorp Industries we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.