A Quick Analysis On Chin Hin Group Berhad's (KLSE:CHINHIN) CEO Salary

Haw Choon Chiau is the CEO of Chin Hin Group Berhad (KLSE:CHINHIN), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Chin Hin Group Berhad.

See our latest analysis for Chin Hin Group Berhad

Comparing Chin Hin Group Berhad's CEO Compensation With the industry

At the time of writing, our data shows that Chin Hin Group Berhad has a market capitalization of RM751m, and reported total annual CEO compensation of RM1.5m for the year to December 2019. That's a notable increase of 27% on last year. Notably, the salary of RM1.5m is the entirety of the CEO compensation.

For comparison, other companies in the same industry with market capitalizations ranging between RM406m and RM1.6b had a median total CEO compensation of RM1.3m. So it looks like Chin Hin Group Berhad compensates Haw Choon Chiau in line with the median for the industry. What's more, Haw Choon Chiau holds RM23m 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 80% of total compensation represents salary, while the remainder of 20% is other remuneration. On a company level, Chin Hin Group Berhad prefers to reward its CEO through a salary, opting not to pay Haw Choon Chiau through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Chin Hin Group Berhad's Growth

Over the last three years, Chin Hin Group Berhad has shrunk its earnings per share by 33% per year. Its revenue is down 11% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last 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 Chin Hin Group Berhad Been A Good Investment?

With a total shareholder return of 26% over three years, Chin Hin Group Berhad shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Chin Hin Group Berhad pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Chin Hin Group Berhad pays its CEO in line with similar-sized companies belonging to the same industry. Chin Hin Group Berhad has had a poor showing when it comes to EPS growth, and it's tough to say that shareholder returns have done much to excite us. This doesn't compare well with CEO compensation, which is close to the industry median. We wouldn't go as far as saying CEO compensation is inappropriate, but we don't think the executive is underpaid.

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 Chin Hin Group Berhad you should be aware of, and 1 of them shouldn't be ignored.

Important note: Chin Hin Group 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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