How Much Does Gadang Holdings Berhad's (KLSE:GADANG) CEO Make?

Kok Onn has been the CEO of Gadang Holdings Berhad (KLSE:GADANG) since 1997, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Gadang Holdings Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Gadang Holdings Berhad

Comparing Gadang Holdings Berhad's CEO Compensation With the industry

According to our data, Gadang Holdings Berhad has a market capitalization of RM288m, and paid its CEO total annual compensation worth RM1.6m over the year to May 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of RM1.46m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below RM831m, we found that the median total CEO compensation was RM850k. Accordingly, our analysis reveals that Gadang Holdings Berhad pays Kok Onn north of the industry median. What's more, Kok Onn holds RM37m 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 79% of total compensation out of all the companies we analyzed, while other remuneration made up 21% of the pie. Gadang Holdings Berhad pays out 92% of remuneration in the form of a salary, significantly higher than the industry average. 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.

Gadang Holdings Berhad's Growth

Over the last three years, Gadang Holdings Berhad has shrunk its earnings per share by 32% per year. Its revenue is down 2.2% over the previous 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 Gadang Holdings Berhad Been A Good Investment?

With a three year total loss of 65% for the shareholders, Gadang Holdings Berhad would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Kok is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. 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. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

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 Gadang Holdings Berhad that you should be aware of before investing.

Switching gears from Gadang Holdings 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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