Here's Why Supercomnet Technologies Berhad's (KLSE:SCOMNET) CEO May Deserve A Raise

By
Simply Wall St
Published
August 25, 2021
KLSE:SCOMNET
Source: Shutterstock

Shareholders will be pleased by the impressive results for Supercomnet Technologies Berhad (KLSE:SCOMNET) recently and CEO James Shiue has played a key role. At the upcoming AGM on 01 September 2021, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

Check out our latest analysis for Supercomnet Technologies Berhad

How Does Total Compensation For James Shiue Compare With Other Companies In The Industry?

According to our data, Supercomnet Technologies Berhad has a market capitalization of RM1.1b, and paid its CEO total annual compensation worth RM492k over the year to December 2020. Notably, that's an increase of 40% over the year before. We note that the salary portion, which stands at RM393.6k constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between RM422m and RM1.7b, we discovered that the median CEO total compensation of that group was RM1.3m. That is to say, James Shiue is paid under the industry median. Moreover, James Shiue also holds RM345m worth of Supercomnet Technologies Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary RM394k RM258k 80%
Other RM98k RM93k 20%
Total CompensationRM492k RM351k100%

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. Although there is a difference in how total compensation is set, Supercomnet Technologies Berhad more or less reflects the market in terms of setting the salary. 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.

ceo-compensation
KLSE:SCOMNET CEO Compensation August 25th 2021

A Look at Supercomnet Technologies Berhad's Growth Numbers

Supercomnet Technologies Berhad has seen its earnings per share (EPS) increase by 48% a year over the past three years. In the last year, its revenue is up 9.3%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Supercomnet Technologies Berhad Been A Good Investment?

Boasting a total shareholder return of 158% over three years, Supercomnet Technologies Berhad has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Supercomnet Technologies Berhad that investors should look into moving forward.

Switching gears from Supercomnet Technologies 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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