What Can We Learn About Pelikan International Corporation Berhad's (KLSE:PELIKAN) CEO Compensation?

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.

View our latest analysis for Pelikan International Corporation Berhad

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

Our data indicates that Pelikan International Corporation Berhad has a market capitalization of RM175m, and total annual CEO compensation was reported as RM1.9m for the year to December 2019. Notably, that's a decrease of 11% over the year before. Notably, the salary which is RM1.67m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below RM835m, reported a median total CEO compensation of RM475k. This suggests that Hooi Loo is paid more than the median for the industry. What's more, Hooi Loo holds RM18m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. Pelikan International Corporation Berhad is paying a higher share of its remuneration through a 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.

A Look at Pelikan International Corporation Berhad's Growth Numbers

Pelikan International Corporation Berhad has reduced its earnings per share by 84% a year over the last three years. In the last year, its revenue is down 8.2%.

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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Pelikan International Corporation Berhad Been A Good Investment?

With a three year total loss of 66% for the shareholders, Pelikan International Corporation Berhad would certainly have some dissatisfied shareholders. 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. 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. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Pelikan International Corporation Berhad that investors should be aware of in a dynamic business environment.

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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