Key Insights

• StarHub to hold its Annual General Meeting on 25th of April
• CEO Nikhil Oommen Eapen's total compensation includes salary of S$1.12m
• The overall pay is 66% below the industry average
• StarHub's total shareholder return over the past three years was 1.1% while its EPS was down 1.6% over the past three years

Performance at StarHub Ltd (SGX:CC3) has been rather uninspiring recently and shareholders may be wondering how CEO Nikhil Oommen Eapen plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 25th of April. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

How Does Total Compensation For Nikhil Oommen Eapen Compare With Other Companies In The Industry?

According to our data, StarHub Ltd has a market capitalization of S$2.0b, and paid its CEO total annual compensation worth S$3.5m over the year to December 2023. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at S$1.1m.

On comparing similar companies from the Singapore Wireless Telecom industry with market caps ranging from S$1.4b to S$4.3b, we found that the median CEO total compensation was S$10m. That is to say, Nikhil Oommen Eapen is paid under the industry median. Moreover, Nikhil Oommen Eapen also holds S$2.1m worth of StarHub stock directly under their own name.

On an industry level, around 39% of total compensation represents salary and 61% is other remuneration. StarHub sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at StarHub Ltd's Growth Numbers

Over the last three years, StarHub Ltd has shrunk its earnings per share by 1.6% per year. Its revenue is up 2.0% over the last year.

The lack of EPS growth is certainly uninspiring. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has StarHub Ltd Been A Good Investment?

StarHub Ltd has not done too badly by shareholders, with a total return of 1.1%, over three years. It would be nice to see that metric improve in the future. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

Shareholder returns while positive, need to be looked at along with earnings, which have failed to grow and this could mean that the current momentum may not continue. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for StarHub that investors should look into moving forward.

Switching gears from StarHub, 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.