How Should Investors Feel About Brem Holding Berhad's (KLSE:BREM) CEO Remuneration?

The CEO of Brem Holding Berhad (KLSE:BREM) is Chai Kaa Khoo, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Brem Holding Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Brem Holding Berhad

How Does Total Compensation For Chai Kaa Khoo Compare With Other Companies In The Industry?

At the time of writing, our data shows that Brem Holding Berhad has a market capitalization of RM270m, and reported total annual CEO compensation of RM583k for the year to March 2020. That's a notable increase of 57% on last year. Notably, the salary which is RM567.9k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under RM807m, the reported median total CEO compensation was RM935k. Accordingly, Brem Holding Berhad pays its CEO under the industry median. Furthermore, Chai Kaa Khoo directly owns RM42m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 79% of total compensation represents salary and 21% is other remuneration. Investors will find it interesting that Brem Holding Berhad pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. 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 Brem Holding Berhad's Growth Numbers

Brem Holding Berhad has reduced its earnings per share by 20% a year over the last three years. Its revenue is down 33% over the previous 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Brem Holding Berhad Been A Good Investment?

With a three year total loss of 14% for the shareholders, Brem Holding Berhad would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Chai Kaa receives almost all of their compensation through a salary. As previously discussed, Chai Kaa is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Brem Holding Berhad that investors should look into moving forward.

Switching gears from Brem Holding Berhad, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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