How Does Eversafe Rubber Berhad's (KLSE:ESAFE) CEO Pay Compare With Company Performance?

This article will reflect on the compensation paid to Siang Cheah who has served as CEO of Eversafe Rubber Berhad (KLSE:ESAFE) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Eversafe Rubber Berhad.

Check out our latest analysis for Eversafe Rubber Berhad

Comparing Eversafe Rubber Berhad's CEO Compensation With the industry

Our data indicates that Eversafe Rubber Berhad has a market capitalization of RM64m, and total annual CEO compensation was reported as RM563k for the year to December 2019. We note that's a decrease of 9.9% compared to last year. Notably, the salary which is RM365.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under RM811m, the reported median total CEO compensation was RM131k. This suggests that Siang Cheah is paid more than the median for the industry.

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. Eversafe Rubber Berhad pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Eversafe Rubber Berhad's Growth

Over the past three years, Eversafe Rubber Berhad has seen its earnings per share (EPS) grow by 96% per year. In the last year, its revenue is down 5.9%.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 Eversafe Rubber Berhad Been A Good Investment?

Given the total shareholder loss of 16% over three years, many shareholders in Eversafe Rubber Berhad are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Eversafe Rubber Berhad is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, we must not forget that the EPS growth has been very strong, but shareholder returns — over the same period — have been disappointing. Considering overall performance, we can't say Siang is underpaid, in fact compensation is definitely on the higher side.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Eversafe Rubber Berhad you should be aware of, and 1 of them is a bit unpleasant.

Important note: Eversafe Rubber Berhad is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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