Shareholders May Not Be So Generous With VICOM Ltd's (SGX:WJP) CEO Compensation And Here's Why

Key Insights

• VICOM to hold its Annual General Meeting on 23rd of April
• CEO Wing Yew Sim's total compensation includes salary of S$390.6k
• Total compensation is 394% above industry average
• VICOM's EPS grew by 5.7% over the past three years while total shareholder loss over the past three years was 28%

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The underwhelming share price performance of VICOM Ltd (SGX:WJP) 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. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 23rd of April. 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.

How Does Total Compensation For Wing Yew Sim Compare With Other Companies In The Industry?

At the time of writing, our data shows that VICOM Ltd has a market capitalization of S$475m, and reported total annual CEO compensation of S$716k for the year to December 2024. That's slightly lower by 7.7% over the previous year. We note that the salary of S$390.6k makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the Singapore Commercial Services industry with market capitalizations ranging between S$263m and S$1.1b had a median total CEO compensation of S$145k. This suggests that Wing Yew Sim is paid more than the median for the industry.

Talking in terms of the industry, salary represented approximately 92% of total compensation out of all the companies we analyzed, while other remuneration made up 8% of the pie. VICOM pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at VICOM Ltd's Growth Numbers

Over the past three years, VICOM Ltd has seen its earnings per share (EPS) grow by 5.7% per year. In the last year, its revenue is up 6.8%.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. 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 VICOM Ltd Been A Good Investment?

With a three year total loss of 28% for the shareholders, VICOM Ltd would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for VICOM that investors should think about before committing capital to this stock.

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.

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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.