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We Discuss Why Federal International (2000) Ltd's (SGX:BDU) CEO Compensation May Be Closely Reviewed

Key Insights

  • Federal International (2000) to hold its Annual General Meeting on 30th of April

  • Total pay for CEO Kian Kiong Koh includes S$576.0k salary

  • The total compensation is 802% higher than the average for the industry

  • Federal International (2000)'s three-year loss to shareholders was 6.3% while its EPS was down 46% over the past three years

Federal International (2000) Ltd (SGX:BDU) has not performed well recently and CEO Kian Kiong Koh will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 30th 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. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Federal International (2000)

Comparing Federal International (2000) Ltd's CEO Compensation With The Industry

According to our data, Federal International (2000) Ltd has a market capitalization of S$17m, and paid its CEO total annual compensation worth S$661k over the year to December 2023. That's a fairly small increase of 3.9% over the previous year. Notably, the salary which is S$576.0k, represents most of the total compensation being paid.

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In comparison with other companies in the Singapore Trade Distributors industry with market capitalizations under S$272m, the reported median total CEO compensation was S$73k. Accordingly, our analysis reveals that Federal International (2000) Ltd pays Kian Kiong Koh north of the industry median.

Component

2023

2022

Proportion (2023)

Salary

S$576k

S$552k

87%

Other

S$85k

S$84k

13%

Total Compensation

S$661k

S$636k

100%

Speaking on an industry level, nearly 93% of total compensation represents salary, while the remainder of 7% is other remuneration. Although there is a difference in how total compensation is set, Federal International (2000) more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

A Look at Federal International (2000) Ltd's Growth Numbers

Federal International (2000) Ltd has reduced its earnings per share by 46% a year over the last three years. In the last year, its revenue is down 63%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Federal International (2000) Ltd Been A Good Investment?

With a three year total loss of 6.3% for the shareholders, Federal International (2000) Ltd would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Federal International (2000) (1 is a bit unpleasant!) that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.