Here's What We Think About Emico Holdings Berhad's (KLSE:EMICO) CEO Pay

The CEO of Emico Holdings Berhad (KLSE:EMICO) is Francis Lim, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Emico Holdings Berhad.

View our latest analysis for Emico Holdings Berhad

Comparing Emico Holdings Berhad's CEO Compensation With the industry

According to our data, Emico Holdings Berhad has a market capitalization of RM37m, and paid its CEO total annual compensation worth RM520k over the year to March 2020. We note that's a small decrease of 3.1% on last year. Notably, the salary which is RM495.7k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below RM815m, we found that the median total CEO compensation was RM367k. Accordingly, our analysis reveals that Emico Holdings Berhad pays Francis Lim north of the industry median. What's more, Francis Lim holds RM8.1m 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 85% of total compensation out of all the companies we analyzed, while other remuneration made up 15% of the pie. Emico Holdings Berhad has gone down a largely traditional route, paying Francis Lim a high salary, giving it preference over non-salary benefits. 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 Emico Holdings Berhad's Growth Numbers

Emico Holdings Berhad's earnings per share (EPS) grew 68% per year over the last three years. Its revenue is down 22% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Emico Holdings Berhad Been A Good Investment?

Most shareholders would probably be pleased with Emico Holdings Berhad for providing a total return of 44% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Emico Holdings Berhad pays its CEO a majority of compensation through a salary. As previously discussed, Francis is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Francis's performance creates value for the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Emico Holdings Berhad (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Emico Holdings 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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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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