Wing Fu is the CEO of EITA Resources Berhad (KLSE:EITA), 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 EITA Resources Berhad.
Check out our latest analysis for EITA Resources Berhad
How Does Total Compensation For Wing Fu Compare With Other Companies In The Industry?
Our data indicates that EITA Resources Berhad has a market capitalization of RM356m, and total annual CEO compensation was reported as RM1.4m for the year to September 2020. That's a fairly small increase of 3.1% over the previous year. Notably, the salary which is RM852.0k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under RM809m, the reported median total CEO compensation was RM339k. Hence, we can conclude that Wing Fu is remunerated higher than the industry median. Moreover, Wing Fu also holds RM2.2m worth of EITA Resources Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | RM852k | RM822k | 60% |
| Other | RM573k | RM560k | 40% |
| Total Compensation | RM1.4m | RM1.4m | 100% |
On an industry level, roughly 71% of total compensation represents salary and 29% is other remuneration. In EITA Resources Berhad's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
EITA Resources Berhad's Growth
EITA Resources Berhad has reduced its earnings per share by 4.6% a year over the last three years. Its revenue is down 7.0% 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. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 EITA Resources Berhad Been A Good Investment?
Most shareholders would probably be pleased with EITA Resources Berhad for providing a total return of 78% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
As previously discussed, Wing is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. We feel that EPS have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So while we don't think, Wing is paid too much, shareholders may want to see some positive EPS growth before pay rises are 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. That's why we did some digging and identified 3 warning signs for EITA Resources Berhad that investors should think about before committing capital to this stock.
Important note: EITA Resources 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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About KLSE:EITA
EITA Resources Berhad
An investment holding company, manufactures, distributes, and sells elevators and busduct systems in Malaysia.
Proven track record with adequate balance sheet.
