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Here’s Why Selangor Dredging Berhad’s (KLSE:SDRED) CEO Compensation Is The Least Of Shareholders’ Concerns


Posted on September 25, 2023

  • Selangor Dredging Berhad’s Annual General Meeting to take place on 29th of September
  • CEO Lip Teh’s total compensation includes salary of RM644.8k
  • Total compensation is similar to the industry average
  • Over the past three years, Selangor Dredging Berhad’s EPS grew by 101% and over the past three years, the total shareholder return was 22%

Under the guidance of CEO Lip Teh, Selangor Dredging Berhad (KLSE:SDRED) has performed reasonably well recently. As shareholders go into the upcoming AGM on 29th of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Selangor Dredging Berhad

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

At the time of writing, our data shows that Selangor Dredging Berhad has a market capitalization of RM256m, and reported total annual CEO compensation of RM685k for the year to March 2023. That’s a notable increase of 33% on last year. Notably, the salary which is RM644.8k, represents most of the total compensation being paid.

In comparison with other companies in the Malaysian Real Estate industry with market capitalizations under RM936m, the reported median total CEO compensation was RM873k. So it looks like Selangor Dredging Berhad compensates Lip Teh in line with the median for the industry. Furthermore, Lip Teh directly owns RM53m worth of shares in the company, implying that they are deeply invested in the company’s success.

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. Selangor Dredging Berhad is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.

A Look at Selangor Dredging Berhad’s Growth Numbers

Selangor Dredging Berhad has seen its earnings per share (EPS) increase by 101% a year over the past three years. Its revenue is up 148% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Selangor Dredging Berhad Been A Good Investment?

Selangor Dredging Berhad has generated a total shareholder return of 22% over three years, so most shareholders would be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.


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