How Much is Metrod Holdings Berhad's (KLSE:METROD) CEO Getting Paid?

Rajan Mittal has been the CEO of Metrod Holdings Berhad (KLSE:METROD) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Metrod Holdings Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Metrod Holdings Berhad

Comparing Metrod Holdings Berhad's CEO Compensation With the industry

According to our data, Metrod Holdings Berhad has a market capitalization of RM156m, and paid its CEO total annual compensation worth RM3.3m over the year to December 2019. Notably, that's an increase of 53% over the year before. We note that the salary portion, which stands at RM3.14m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below RM808m, reported a median total CEO compensation of RM1.2m. Accordingly, our analysis reveals that Metrod Holdings Berhad pays Rajan Mittal north of the industry median.

Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. Metrod Holdings Berhad pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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.

Metrod Holdings Berhad's Growth

Over the last three years, Metrod Holdings Berhad has shrunk its earnings per share by 82% per year. It saw its revenue drop 34% over the last year.

Few shareholders would be pleased to read that EPS have declined. 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. 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 Metrod Holdings Berhad Been A Good Investment?

Since shareholders would have lost about 20% over three years, some Metrod Holdings Berhad investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Metrod Holdings Berhad pays its CEO a majority of compensation through a salary. As previously discussed, Rajan is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. To make matters worse, EPS growth has also been negative during this period. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 2 which are concerning) in Metrod Holdings Berhad we think you should know about.

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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