Key Things To Understand About Ireka Corporation Berhad's (KLSE:IREKA) CEO Pay Cheque

Voon Lai became the CEO of Ireka Corporation Berhad (KLSE:IREKA) in 2015, 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 assess whether Ireka Corporation Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Ireka Corporation Berhad

How Does Total Compensation For Voon Lai Compare With Other Companies In The Industry?

At the time of writing, our data shows that Ireka Corporation Berhad has a market capitalization of RM62m, and reported total annual CEO compensation of RM1.1m for the year to March 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at RM889.2k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below RM803m, reported a median total CEO compensation of RM937k. This suggests that Ireka Corporation Berhad remunerates its CEO largely in line with the industry average.

On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. There isn't a significant difference between Ireka Corporation Berhad and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Ireka Corporation Berhad's Growth

Over the last three years, Ireka Corporation Berhad has shrunk its earnings per share by 42% per year. Its revenue is down 20% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Ireka Corporation Berhad Been A Good Investment?

With a three year total loss of 52% for the shareholders, Ireka Corporation Berhad would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Ireka Corporation Berhad pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Ireka Corporation Berhad you should be aware of, and 1 of them is concerning.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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