The underwhelming share price performance of Khong Guan Limited (SGX:K03) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 30 November 2022. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Khong Guan

How Does Total Compensation For Soo Eng Chew Compare With Other Companies In The Industry?

Our data indicates that Khong Guan Limited has a market capitalization of S$34m, and total annual CEO compensation was reported as S$462k for the year to July 2022. We note that's a small decrease of 5.9% on last year. Notably, the salary which is S$371.9k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below S$276m, reported a median total CEO compensation of S$155k. Accordingly, our analysis reveals that Khong Guan Limited pays Soo Eng Chew north of the industry median. Furthermore, Soo Eng Chew directly owns S$292k worth of shares in the company.

Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 9% is other remuneration. It's interesting to note that Khong Guan allocates a smaller portion of compensation to salary in comparison to the broader industry. 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.

Khong Guan Limited's Growth

Khong Guan Limited has seen its earnings per share (EPS) increase by 15% a year over the past three years. Its revenue is up 12% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Khong Guan Limited Been A Good Investment?

Since shareholders would have lost about 25% over three years, some Khong Guan Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Khong Guan you should be aware of, and 2 of them don't sit too well with us.

Switching gears from Khong Guan, 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.