How Much is SMIS Corporation Berhad's (KLSE:SMISCOR) CEO Getting Paid?

Wai Ng became the CEO of SMIS Corporation Berhad (KLSE:SMISCOR) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for SMIS Corporation Berhad.

See our latest analysis for SMIS Corporation Berhad

How Does Total Compensation For Wai Ng Compare With Other Companies In The Industry?

Our data indicates that SMIS Corporation Berhad has a market capitalization of RM21m, and total annual CEO compensation was reported as RM799k for the year to December 2019. That's a notable increase of 12% on last year. We note that the salary portion, which stands at RM646.9k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below RM822m, reported a median total CEO compensation of RM563k. Accordingly, our analysis reveals that SMIS Corporation Berhad pays Wai Ng north of the industry median. What's more, Wai Ng holds RM775k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. There isn't a significant difference between SMIS Corporation Berhad and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at SMIS Corporation Berhad's Growth Numbers

Over the last three years, SMIS Corporation Berhad has shrunk its earnings per share by 32% per year. It saw its revenue drop 23% over the last year.

Few shareholders would be pleased to read that EPS have declined. 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 SMIS Corporation Berhad Been A Good Investment?

Given the total shareholder loss of 13% over three years, many shareholders in SMIS Corporation Berhad are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, SMIS Corporation 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. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for SMIS Corporation Berhad (of which 2 are a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

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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