What We Learned About Asia File Corporation Bhd's (KLSE:ASIAFLE) CEO Compensation

The CEO of Asia File Corporation Bhd. (KLSE:ASIAFLE) is Soon Lim, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Asia File Corporation Bhd pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Asia File Corporation Bhd

Comparing Asia File Corporation Bhd.'s CEO Compensation With the industry

At the time of writing, our data shows that Asia File Corporation Bhd. has a market capitalization of RM393m, and reported total annual CEO compensation of RM1.1m for the year to March 2020. Notably, that's an increase of 8.5% over the year before. We note that the salary portion, which stands at RM838.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below RM804m, we found that the median total CEO compensation was RM478k. Hence, we can conclude that Soon Lim is remunerated higher than the industry median. Moreover, Soon Lim also holds RM184m worth of Asia File Corporation Bhd stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 83% of total compensation out of all the companies we analyzed, while other remuneration made up 17% of the pie. Asia File Corporation Bhd sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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.

Asia File Corporation Bhd.'s Growth

Over the last three years, Asia File Corporation Bhd. has shrunk its earnings per share by 19% per year. Its revenue is down 18% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Asia File Corporation Bhd. Been A Good Investment?

With a three year total loss of 23% for the shareholders, Asia File Corporation Bhd. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Asia File Corporation Bhd pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

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. We identified 2 warning signs for Asia File Corporation Bhd (1 is a bit unpleasant!) that you should be aware of before investing here.

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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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