How Great Eastern Holding Limited Pays Its CEO & Directors

How a company’s leaders – its chief executive and directors – are paid can be an important thing to study for its shareholders.

For instance, the interest of a company’s shareholders and its leaders may not be aligned if said company pays a rising salary in each year in the face of falling profits or business results.

With this in mind, let’s take a look at how Great Eastern Holding Limited (SGX: G07) pays its chief executive and directors. Great Eastern is Singapore’s oldest insurer and it’s not a tiny company by any means – right now, the company has S$68.1 billion in total assets.

Here’s a chart showing how the company paid its CEO and directors in 2014 and 2015:

Source: Great Eastern annual reports

One general trend to point out is that Great Eastern’s leaders were generally paid more in 2015 than in 2014.

Christopher Wei stepped down as the company’s CEO on 30 September 2014 and that’s why he wasn’t paid anything in 2015. Great Eastern got itself a new CEO when Khor Hock Seng took on the role in November 2015. During the company’s leadership transition, Norman Ip was appointed Acting CEO, which explains why his total remuneration in 2014 and 2015 was generally a cut above the rest of the directors.

In 2015, Great Eastern saw its profit attributable to shareholders decline from S$879 million in 2014 to S$785 million. Meanwhile, the firm’s return on equity also dipped from 16% to 13%.

But, the insurer’s book value per share had grown by 6% from S$12.41 in 2014 to S$13.16 in 2015. Great Eastern had also grown its embedded value by 5.4% to S$11.001 billion and its gross premiums (essentially revenue) had stepped up by 6.7% to S$8.76 billion.

So to sum it up, Great Eastern’s CEO and directors were generally paid more in 2015, a year in which the insurer saw growth in some areas and declines in others.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Ong Kai Kiat does not own shares in any companies mentioned.