How Much Is New Hoong Fatt Holdings Berhad (KLSE:NHFATT) CEO Getting Paid?

This article will reflect on the compensation paid to Jit Chin who has served as CEO of New Hoong Fatt Holdings Berhad (KLSE:NHFATT) since 2007. This analysis will also assess whether New Hoong Fatt Holdings Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for New Hoong Fatt Holdings Berhad

How Does Total Compensation For Jit Chin Compare With Other Companies In The Industry?

Our data indicates that New Hoong Fatt Holdings Berhad has a market capitalization of RM182m, and total annual CEO compensation was reported as RM1.0m for the year to December 2019. This means that the compensation hasn't changed much from last year. In particular, the salary of RM808.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under RM810m, the reported median total CEO compensation was RM131k. Accordingly, our analysis reveals that New Hoong Fatt Holdings Berhad pays Jit Chin north of the industry median. What's more, Jit Chin holds RM2.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. There isn't a significant difference between New Hoong Fatt Holdings Berhad and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

New Hoong Fatt Holdings Berhad's Growth

New Hoong Fatt Holdings Berhad has reduced its earnings per share by 28% a year over the last three years. It saw its revenue drop 9.3% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 New Hoong Fatt Holdings Berhad Been A Good Investment?

With a three year total loss of 15% for the shareholders, New Hoong Fatt Holdings Berhad would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, New Hoong Fatt Holdings 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. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for New Hoong Fatt Holdings Berhad you should be aware of, and 1 of them shouldn't be ignored.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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