How Much is FITTERS Diversified Berhad's (KLSE:FITTERS) CEO Getting Paid?

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

Check out our latest analysis for FITTERS Diversified Berhad

How Does Total Compensation For Richard Wong Compare With Other Companies In The Industry?

At the time of writing, our data shows that FITTERS Diversified Berhad has a market capitalization of RM119m, and reported total annual CEO compensation of RM888k for the year to December 2019. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at RM500.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below RM810m, reported a median total CEO compensation of RM340k. Hence, we can conclude that Richard Wong is remunerated higher than the industry median. What's more, Richard Wong holds RM33m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 71% of total compensation out of all the companies we analyzed, while other remuneration made up 29% of the pie. It's interesting to note that FITTERS Diversified Berhad allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

FITTERS Diversified Berhad's Growth

FITTERS Diversified Berhad has reduced its earnings per share by 24% a year over the last three years. Its revenue is down 22% 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has FITTERS Diversified Berhad Been A Good Investment?

Since shareholders would have lost about 36% over three years, some FITTERS Diversified Berhad investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, FITTERS Diversified 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. This doesn't look good against shareholder returns, which have been negative for the past three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for FITTERS Diversified Berhad you should be aware of, and 1 of them is significant.

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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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