Does Boilermech Holdings Berhad's (KLSE:BOILERM) CEO Salary Compare Well With Industry Peers?

Yew Leong is the CEO of Boilermech Holdings Berhad (KLSE:BOILERM), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Boilermech Holdings Berhad

Comparing Boilermech Holdings Berhad's CEO Compensation With the industry

At the time of writing, our data shows that Boilermech Holdings Berhad has a market capitalization of RM542m, and reported total annual CEO compensation of RM1.2m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of RM729.6k, 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 RM812m, the reported median total CEO compensation was RM340k. This suggests that Yew Leong is paid more than the median for the industry. What's more, Yew Leong holds RM38m 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 71% of total compensation represents salary, while the remainder of 29% is other remuneration. In Boilermech Holdings Berhad's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Boilermech Holdings Berhad's Growth Numbers

Boilermech Holdings Berhad has reduced its earnings per share by 3.5% a year over the last three years. It saw its revenue drop 13% over the last year.

The decline in EPS is a bit concerning. 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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Boilermech Holdings Berhad Been A Good Investment?

Most shareholders would probably be pleased with Boilermech Holdings Berhad for providing a total return of 38% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As we noted earlier, Boilermech Holdings Berhad pays its CEO higher than the norm for similar-sized companies belonging to the same industry. We're not seeing great strides in EPS, but the company has clearly pleased some investors, given the returns over the last three years. Considering positive investor returns, it would be bold of us to criticize CEO compensation, but shareholders might want to see healthier EPS growth before a raise is given out.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Boilermech Holdings Berhad that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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