How Much Does Grand Hoover Berhad's (KLSE:HOOVER) CEO Make?

Cheng Sim became the CEO of Grand Hoover Berhad (KLSE:HOOVER) in 2009, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Grand Hoover Berhad.

View our latest analysis for Grand Hoover Berhad

How Does Total Compensation For Cheng Sim Compare With Other Companies In The Industry?

At the time of writing, our data shows that Grand Hoover Berhad has a market capitalization of RM50m, and reported total annual CEO compensation of RM254k for the year to June 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at RM201.2k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under RM808m, the reported median total CEO compensation was RM106k. Accordingly, our analysis reveals that Grand Hoover Berhad pays Cheng Sim north of the industry median. What's more, Cheng Sim holds RM2.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. There isn't a significant difference between Grand Hoover Berhad and the broader market, in terms of salary allocation in the overall compensation package. 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 Grand Hoover Berhad's Growth Numbers

Over the last three years, Grand Hoover Berhad has shrunk its earnings per share by 66% per year. It saw its revenue drop 19% over the last year.

Few shareholders would be pleased to read that EPS have declined. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Grand Hoover Berhad Been A Good Investment?

Boasting a total shareholder return of 97% over three years, Grand Hoover Berhad has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As previously discussed, Cheng 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 would not say that Cheng is generously paid, stockholders would want to see some EPS growth before agreeing that a raise is a good idea.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 4 warning signs for Grand Hoover Berhad (2 are a bit unpleasant!) that you should be aware of before investing here.

Switching gears from Grand Hoover 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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