This article will reflect on the compensation paid to Jason Tai who has served as CEO of Pansar Berhad (KLSE:PANSAR) since 2010. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Pansar Berhad
Comparing Pansar Berhad's CEO Compensation With the industry
At the time of writing, our data shows that Pansar Berhad has a market capitalization of RM326m, and reported total annual CEO compensation of RM1.6m for the year to March 2020. We note that's a small decrease of 4.5% on last year. We note that the salary portion, which stands at RM1.21m constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under RM812m, the reported median total CEO compensation was RM53k. Hence, we can conclude that Jason Tai is remunerated higher than the industry median.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | RM1.2m | RM1.2m | 78% |
| Other | RM337k | RM394k | 22% |
| Total Compensation | RM1.6m | RM1.6m | 100% |
Talking in terms of the industry, salary represented approximately 80% of total compensation out of all the companies we analyzed, while other remuneration made up 20% of the pie. Although there is a difference in how total compensation is set, Pansar Berhad more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Pansar Berhad's Growth Numbers
Over the last three years, Pansar Berhad has shrunk its earnings per share by 32% per year. In the last year, its revenue is down 15%.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Pansar Berhad Been A Good Investment?
Boasting a total shareholder return of 180% over three years, Pansar Berhad has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
As we noted earlier, Pansar Berhad pays its CEO higher than the norm for similar-sized companies belonging to the same industry. We feel that EPS have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So while we don't think, Jason is paid too much, shareholders may want to see some positive EPS growth before pay rises are given out.
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. In our study, we found 4 warning signs for Pansar Berhad you should be aware of, and 1 of them is potentially serious.
Important note: Pansar Berhad is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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About KLSE:PANSAR
Pansar Berhad
Sells and distributes building materials, marine and industrial products, agro-engineering equipment and supplies, and electrical and office automation supplies in Malaysia and Singapore.
Good value with proven track record.
