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QuestionsCategory: Investor PsychologyManagement Quadrant- Remuneration
Ka Fatt Chan asked 3 months ago

Hi Victor,
Good afternoon.
I have the following queries which need your assistance:

  1. Just to confirm the remuneration package include the salary, bonus and share option etc?
  2. How do I get the total amount of the remuneration for individual in the annual report?
  3. What is the guide/benchmark i.e. percentage of the CEO, director remuneration can i base on for verification whether are they overpaid?
  4.  Do I work out the percentage of the remuneration against the net profit income or other?

Thank you,
Ka Fatt

1 Answers
Victor Chng answered 3 months ago

Hi Ka Fatt,

  1. Yes, you are right

  2. For US companies, you can get it from their proxy statement (Form 14A) while Asian companies usually get it from the corporate governance segment or the foot notes. 

  3. There is no benchmark for measuring compensation. The key is to look at the trend of the management salary whether it maintain the percentage. A bad sign is when the company profit decrease while salary goes up.

  4. I usually look at salary to net profit and salary to sales. Like I had mentioned above, it is to see whether the trend maintain. A good trend is when the management salary to net profit or sales is decreasing. This means that the profit is growing faster than their salary increment.