A Look At Kejuruteraanstera Berhad's (KLSE:KAB) CEO Remuneration

Keng Onn Lai is the CEO of Kejuruteraan Asastera Berhad (KLSE:KAB), 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 Kejuruteraanstera Berhad.

View our latest analysis for Kejuruteraanstera Berhad

Comparing Kejuruteraan Asastera Berhad's CEO Compensation With the industry

At the time of writing, our data shows that Kejuruteraan Asastera Berhad has a market capitalization of RM953m, and reported total annual CEO compensation of RM1.6m for the year to December 2019. Notably, that's an increase of 20% over the year before. We note that the salary portion, which stands at RM1.03m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between RM404m and RM1.6b had a median total CEO compensation of RM1.6m. This suggests that Kejuruteraanstera Berhad remunerates its CEO largely in line with the industry average. What's more, Keng Onn Lai holds RM377m 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 80% of total compensation represents salary and 20% is other remuneration. It's interesting to note that Kejuruteraanstera Berhad allocates a smaller portion of compensation to salary in comparison to the broader industry. 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 Kejuruteraan Asastera Berhad's Growth Numbers

Over the last three years, Kejuruteraan Asastera Berhad has shrunk its earnings per share by 14% per year. It achieved revenue growth of 3.2% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. 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 Kejuruteraan Asastera Berhad Been A Good Investment?

Boasting a total shareholder return of 814% over three years, Kejuruteraan Asastera 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.

In Summary...

As previously discussed, Keng Onn is compensated close to the median for companies of its size, and which belong to the same industry. This isn't great when you look at it against the backdrop of EPS growth, which has been negative for the past three years. On the flip side, shareholder returns have been strong over the same time, which is certainly a positive sign. We're not saying CEO compensation is too generous, but shareholders might think performance needs to be improved before paying any more.

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. We've identified 1 warning sign for Kejuruteraanstera Berhad that investors should be aware of in a dynamic business environment.

Switching gears from Kejuruteraanstera 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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