Yahoo Finance Shareholders May Be Wary Of Increasing ISDN Holdings Limited's (SGX:I07) CEO Compensation Package
Key Insights
ISDN Holdings will host its Annual General Meeting on 30th of April
CEO Cher Koon Teo's total compensation includes salary of S$1.31m
The total compensation is 2,485% higher than the average for the industry
ISDN Holdings' EPS declined by 32% over the past three years while total shareholder loss over the past three years was 54%
The results at ISDN Holdings Limited (SGX:I07) have been quite disappointing recently and CEO Cher Koon Teo bears some responsibility for this. At the upcoming AGM on 30th of April, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.
Check out our latest analysis for ISDN Holdings
Comparing ISDN Holdings Limited's CEO Compensation With The Industry
According to our data, ISDN Holdings Limited has a market capitalization of S$136m, and paid its CEO total annual compensation worth S$2.8m over the year to December 2023. That's a notable decrease of 31% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at S$1.3m.
In comparison with other companies in the Singapore Electrical industry with market capitalizations under S$273m, the reported median total CEO compensation was S$108k. Accordingly, our analysis reveals that ISDN Holdings Limited pays Cher Koon Teo north of the industry median. Moreover, Cher Koon Teo also holds S$44m worth of ISDN Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | S$1.3m | S$1.3m | 47% |
Other | S$1.5m | S$2.7m | 53% |
Total Compensation | S$2.8m | S$4.0m | 100% |
On an industry level, around 76% of total compensation represents salary and 24% is other remuneration. ISDN Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
ISDN Holdings Limited's Growth
Over the last three years, ISDN Holdings Limited has shrunk its earnings per share by 32% per year. It saw its revenue drop 7.8% over the last year.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has ISDN Holdings Limited Been A Good Investment?
The return of -54% over three years would not have pleased ISDN Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for ISDN Holdings that investors should think about before committing capital to this stock.
Switching gears from ISDN Holdings, 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.
