AP Oil

[dydx]

AP Oil appears to have a decent, well-established regional business and quite a good operating and profit track record, and its share price - last done at $0.21 on 30Jan14 - appears grossly under-priced.

[grubb]

The EDs of AP Oil took home about 1.8mil in 2012 and about 1.6mil 2011. This is about 30-40% of net profit. This is quite high for me.

In comparison, Breadtalk EDs took about 1.3mil in 2012, which is about 10% of net profit.

I just took a short look at the financials, and comparing with Breadtalk is a random choice. Anyway, any buddies like to share your opinion on director remuneration? Should there be a cut off or some way to measure how much is too much?

[weijian]

hi grubb,
My 2 cents worth:

- Might be more indicative to compare remuneration between either similar market cap or similar sector for a better comparison.

- Generally, it is better to avoid small cap owners who decide to milk the golden goose, rather than allowing the goose to multiply. If the owner owns a large stake (let's say >30%), thereotically, any for-gone profits that feeds into the net profit are supposed to boast the net wealth of the owner (through increase in stock price) if Mr Market prices it into the P/E ratio. That is one of the safe guard that OPMI (outside passive minority investor) has while trying to 'swim with the sharks'.

- IMHO, i feel that remuneration quantum is just a symptom of the more important question of whether the OPMI's rights and interests, are respected and aligned to Management respectively. To conclude, we should also check for other symptoms - (1) dividend pay-out ratio, (2) Is Mgt rewarded with stock options or cash...how are the stock options priced? (3) Does the remuneration structure encourages behavior that rewards shareholders for the long term, or otherwise? (4) Is the remuneration structured fairly? ie. they fluctuate with company's performance.......<i hope u get the point>

[dydx]

The EDs of AP Oil took home about 1.8mil in 2012 and about 1.6mil 2011. This is about 30-40% of net profit. This is quite high for me.

From the latest FY12 AR…..
http://www.apoil.com.sg/UploadedImg/file...AR2012.pdf
AP Oil has 4 EDs - Ho Leng Woon ("HLW"), Chairman & MD and founder; Ho Chee Hon (HLW's son), ED & Group Dep. CEO; Chang Kwok Wah, ED and MD of subsidiary A.I.M. Chemical Industries P/L; and Lau Woon Chan (HLW's wife), ED and founder - and they were paid a total remuneration of $1.84m in FY12 (+11.1% vs. FY11), while the 3 IDs took home a total of $82k in fees in FY12 (vs. $105k in FY11). [see p47]

From p20, we know, in FY12, HLW received a remuneration package of between $700 to $800k, of which 56.2% in salary incl. CPF, and 42.6% in bonus/profit sharing (presumably based on a certain formula directly linked to AP Oil's financial performance). The other 3 EDs each received between $300 to $400k, of which between 35.1% to 58.8% in the form of bonus/profit sharing.

To be more meaningful, I feel we should compare the total remuneration of the 4 EDs (i.e. $1.84m) with AP Oil's reported Group PBT (i.e. $6.521m) adjusted (i.e. by adding back) for their total remuneration. My computation shows 22% [1.84m / ($6.521m+$1.84m)], which looks more reasonable, considering we have a team of 4 experienced people heading/running the group's businesses.

[dydx]

AP Oil has delivered a set of decent numbers in its just released FY13 (ended 31Dec13) full-year results…..
http://infopub.sgx.com/FileOpen/APOil_Re...eID=276321 [result announcement]

Cash reserve has increased to $26.2m - equivalent to $0.159/share - as at 31Dec13 (vs. 31Dec12: $20.4m); obviously, this business does accumulate cash.

An unchanged $0.005/share dividend declared, which will be paid out as an Interim dividend on 27Mar14, before the AGM usually held end-Apr or early May.

[felixleong]

The EDs of AP Oil took home about 1.8mil in 2012 and about 1.6mil 2011. This is about 30-40% of net profit. This is quite high for me.

In comparison, Breadtalk EDs took about 1.3mil in 2012, which is about 10% of net profit.

I just took a short look at the financials, and comparing with Breadtalk is a random choice. Anyway, any buddies like to share your opinion on director remuneration? Should there be a cut off or some way to measure how much is too much?

I generally like companies that pays good dividends, I like it even more when the major shareholder collects more from his dividends than his salary and that for me is the best way to measure.

[SLC81]

Hmm Stuck with this for many years

[specuvestor]

The EDs of AP Oil took home about 1.8mil in 2012 and about 1.6mil 2011. This is about 30-40% of net profit. This is quite high for me.

In comparison, Breadtalk EDs took about 1.3mil in 2012, which is about 10% of net profit.

I just took a short look at the financials, and comparing with Breadtalk is a random choice. Anyway, any buddies like to share your opinion on director remuneration? Should there be a cut off or some way to measure how much is too much?

I generally like companies that pays good dividends, I like it even more when the major shareholder collects more from his dividends than his salary and that for me is the best way to measure.

Agree with this rule of thumb. The other rule of thub is cash paid to directors vs cash paid to all shareholders. In this case they paid about S$0.8m for all shareholders

[zz...]

http://infopub.sgx.com/FileOpen/ApOilNot...eID=110512

[felixleong]

http://infopub.sgx.com/FileOpen/ApOilNot...eID=110512

wow red flag