Does Signature International Berhad's (KLSE:SIGN) CEO Salary Compare Well With The Performance Of The Company?

Kee Tan became the CEO of Signature International Berhad (KLSE:SIGN) in 2007, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Signature International Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Signature International Berhad

How Does Total Compensation For Kee Tan Compare With Other Companies In The Industry?

According to our data, Signature International Berhad has a market capitalization of RM118m, and paid its CEO total annual compensation worth RM681k over the year to June 2020. We note that's a decrease of 14% compared to last year. Notably, the salary which is RM581.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under RM812m, the reported median total CEO compensation was RM407k. This suggests that Kee Tan is paid more than the median for the industry.

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. Although there is a difference in how total compensation is set, Signature International Berhad more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Signature International Berhad's Growth Numbers

Over the last three years, Signature International Berhad has shrunk its earnings per share by 118% per year. Its revenue is down 20% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Signature International Berhad Been A Good Investment?

Given the total shareholder loss of 23% over three years, many shareholders in Signature International Berhad are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Kee is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Signature International Berhad that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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