Does Pelikan International Corporation Berhad's (KLSE:PELIKAN) CEO Salary Compare Well With Industry Peers?

This article will reflect on the compensation paid to Hooi Loo who has served as CEO of Pelikan International Corporation Berhad (KLSE:PELIKAN) since 2007. This analysis will also assess whether Pelikan International Corporation Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Pelikan International Corporation Berhad

How Does Total Compensation For Hooi Loo Compare With Other Companies In The Industry?

According to our data, Pelikan International Corporation Berhad has a market capitalization of RM187m, and paid its CEO total annual compensation worth RM1.9m over the year to December 2019. That's a notable decrease of 11% on last year. We note that the salary portion, which stands at RM1.67m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below RM812m, reported a median total CEO compensation of RM478k. Accordingly, our analysis reveals that Pelikan International Corporation Berhad pays Hooi Loo north of the industry median. What's more, Hooi Loo holds RM19m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 83% of total compensation represents salary and 17% is other remuneration. Our data reveals that Pelikan International Corporation Berhad allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Pelikan International Corporation Berhad's Growth

Pelikan International Corporation Berhad has reduced its earnings per share by 39% a year over the last three years. It saw its revenue drop 5.6% over the last year.

Overall this is not a very positive result for shareholders. 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. 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 Pelikan International Corporation Berhad Been A Good Investment?

Since shareholders would have lost about 64% over three years, some Pelikan International Corporation Berhad investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, Pelikan International Corporation Berhad pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. 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 2 warning signs (and 1 which shouldn't be ignored) in Pelikan International Corporation Berhad we think you should know about.

Important note: Pelikan International Corporation 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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