Yahoo Finance Here's Why Shareholders Should Examine AEM Holdings Ltd.'s (SGX:AWX) CEO Compensation Package More Closely
Key Insights
AEM Holdings to hold its Annual General Meeting on 24th of April
Total pay for CEO Chandran Nair includes S$520.7k salary
The total compensation is 320% higher than the average for the industry
Over the past three years, AEM Holdings' EPS fell by 30% and over the past three years, the total loss to shareholders 38%
The results at AEM Holdings Ltd. (SGX:AWX) have been quite disappointing recently and CEO Chandran Nair bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 24th of April. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.
See our latest analysis for AEM Holdings
How Does Total Compensation For Chandran Nair Compare With Other Companies In The Industry?
According to our data, AEM Holdings Ltd. has a market capitalization of S$727m, and paid its CEO total annual compensation worth S$1.0m over the year to December 2023. We note that's a decrease of 37% compared to last year. Notably, the salary which is S$520.7k, represents a considerable chunk of the total compensation being paid.
For comparison, other companies in the Singapore Semiconductor industry with market capitalizations ranging between S$273m and S$1.1b had a median total CEO compensation of S$240k. Accordingly, our analysis reveals that AEM Holdings Ltd. pays Chandran Nair north of the industry median. Furthermore, Chandran Nair directly owns S$585k worth of shares in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | S$521k | S$517k | 52% |
Other | S$488k | S$1.1m | 48% |
Total Compensation | S$1.0m | S$1.6m | 100% |
Speaking on an industry level, nearly 68% of total compensation represents salary, while the remainder of 32% is other remuneration. In AEM Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
AEM Holdings Ltd.'s Growth
Over the last three years, AEM Holdings Ltd. has shrunk its earnings per share by 30% per year. In the last year, its revenue is down 45%.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 AEM Holdings Ltd. Been A Good Investment?
With a total shareholder return of -38% over three years, AEM Holdings Ltd. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
Whatever your view on compensation, you might want to check if insiders are buying or selling AEM Holdings shares (free trial).
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.
