Should You Worry About Sapura Energy Berhad's (KLSE:SAPNRG) CEO Pay Cheque?

Seri bin Shamsuddin became the CEO of Sapura Energy Berhad (KLSE:SAPNRG) in 2011. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Sapura Energy Berhad

How Does Seri bin Shamsuddin's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Sapura Energy Berhad has a market cap of RM3.7b, and reported total annual CEO compensation of RM13m for the year to January 2019. We think total compensation is more important but we note that the CEO salary is lower, at RM7.2m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of RM1.7b to RM6.7b. The median total CEO compensation was RM2.2m.

It would therefore appear that Sapura Energy Berhad pays Seri bin Shamsuddin more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Sapura Energy Berhad has changed over time.

Is Sapura Energy Berhad Growing?

Sapura Energy Berhad has reduced its earnings per share by an average of 43% a year, over the last three years (measured with a line of best fit). Its revenue is up 99% over last year.

Investors should note that, over three years, earnings per share are down. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. You might want to check this free visual report on analyst forecasts for future earnings.

Has Sapura Energy Berhad Been A Good Investment?

With a three year total loss of 88%, Sapura Energy Berhad would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Sapura Energy Berhad, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Sapura Energy Berhad.

Important note: Sapura Energy Berhad may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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