How Is Kein Hing International Berhad's (KLSE:KEINHIN) CEO Compensated?

Toon Yap has been the CEO of Kein Hing International Berhad (KLSE:KEINHIN) since 2004, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Kein Hing International Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Kein Hing International Berhad

How Does Total Compensation For Toon Yap Compare With Other Companies In The Industry?

According to our data, Kein Hing International Berhad has a market capitalization of RM60m, and paid its CEO total annual compensation worth RM1.2m over the year to April 2020. We note that's a small decrease of 3.8% on last year. Notably, the salary which is RM1.06m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under RM808m, the reported median total CEO compensation was RM340k. This suggests that Toon Yap is paid more than the median for the industry. Furthermore, Toon Yap directly owns RM23m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 71% of total compensation represents salary, while the remainder of 29% is other remuneration. According to our research, Kein Hing International Berhad has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Kein Hing International Berhad's Growth Numbers

Kein Hing International Berhad has reduced its earnings per share by 1.4% a year over the last three years. In the last year, its revenue is down 8.5%.

The lack of EPS growth is certainly unimpressive. 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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Kein Hing International Berhad Been A Good Investment?

Kein Hing International Berhad has not done too badly by shareholders, with a total return of 1.4%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we touched on above, Kein Hing International 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 great when you realize that the company has been suffering from negative EPS growth for the last three years. And shareholder returns are decent but not great. So we think more research is needed, but we don't think the CEO is underpaid.

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 Kein Hing International Berhad you should be aware of, and 1 of them shouldn't be ignored.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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