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Increases to JB Foods Limited's (SGX:BEW) CEO Compensation Might Cool off for now

Key Insights

  • JB Foods will host its Annual General Meeting on 24th of April

  • CEO How Tey's total compensation includes salary of US$319.8k

  • The overall pay is 986% above the industry average

  • Over the past three years, JB Foods' EPS fell by 54% and over the past three years, the total loss to shareholders 15%

Shareholders of JB Foods Limited (SGX:BEW) will have been dismayed by the negative share price return over the last three years. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. Shareholders will have a chance to take their concerns to the board at the next AGM on 24th of April and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

View our latest analysis for JB Foods

How Does Total Compensation For How Tey Compare With Other Companies In The Industry?

According to our data, JB Foods Limited has a market capitalization of S$150m, and paid its CEO total annual compensation worth US$584k over the year to December 2023. We note that's a decrease of 34% compared to last year. Notably, the salary which is US$319.8k, represents a considerable chunk of the total compensation being paid.

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For comparison, other companies in the Singaporean Food industry with market capitalizations below S$273m, reported a median total CEO compensation of US$54k. Hence, we can conclude that How Tey is remunerated higher than the industry median. Furthermore, How Tey directly owns S$2.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2023

2022

Proportion (2023)

Salary

US$320k

US$332k

55%

Other

US$264k

US$552k

45%

Total Compensation

US$584k

US$884k

100%

On an industry level, around 39% of total compensation represents salary and 61% is other remuneration. According to our research, JB Foods has allocated a higher percentage of pay to salary in comparison to the wider industry. 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 JB Foods Limited's Growth Numbers

Over the last three years, JB Foods Limited has shrunk its earnings per share by 54% per year. It achieved revenue growth of 17% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 JB Foods Limited Been A Good Investment?

Given the total shareholder loss of 15% over three years, many shareholders in JB Foods Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. In 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 is in line with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 2 which are significant) in JB Foods we think you should know about.

Important note: JB Foods is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.