What We Learned About Kumpulan Fima Berhad's (KLSE:KFIMA) CEO Pay

This article will reflect on the compensation paid to Roslan bin Hamir who has served as CEO of Kumpulan Fima Berhad (KLSE:KFIMA) since 2009. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Kumpulan Fima Berhad.

View our latest analysis for Kumpulan Fima Berhad

How Does Total Compensation For Roslan bin Hamir Compare With Other Companies In The Industry?

According to our data, Kumpulan Fima Berhad has a market capitalization of RM524m, and paid its CEO total annual compensation worth RM1.1m over the year to March 2020. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at RM513k.

In comparison with other companies in the industry with market capitalizations under RM807m, the reported median total CEO compensation was RM771k. This suggests that Roslan bin Hamir is paid more than the median for the industry. What's more, Roslan bin Hamir holds RM3.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. It's interesting to note that Kumpulan Fima Berhad allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Kumpulan Fima Berhad's Growth Numbers

Kumpulan Fima Berhad's earnings per share (EPS) grew 23% per year over the last three years. Its revenue is up 1.4% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Kumpulan Fima Berhad Been A Good Investment?

We think that the total shareholder return of 40%, over three years, would leave most Kumpulan Fima Berhad shareholders smiling. 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 we noted earlier, Kumpulan Fima Berhad pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, Kumpulan Fima Berhad has produced strong EPS growth and shareholder returns over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Roslan's performance creates value for the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Kumpulan Fima Berhad (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

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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