Does Eduspec Holdings Berhad's (KLSE:EDUSPEC) CEO Salary Compare Well With The Performance Of The Company?

This article will reflect on the compensation paid to Een Lim who has served as CEO of Eduspec Holdings Berhad (KLSE:EDUSPEC) since 2017. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Eduspec Holdings Berhad.

See our latest analysis for Eduspec Holdings Berhad

How Does Total Compensation For Een Lim Compare With Other Companies In The Industry?

At the time of writing, our data shows that Eduspec Holdings Berhad has a market capitalization of RM49m, and reported total annual CEO compensation of RM446k for the year to February 2020. That's a notable decrease of 24% on last year. We note that the salary portion, which stands at RM385.5k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below RM807m, we found that the median total CEO compensation was RM453k. From this we gather that Een Lim is paid around the median for CEOs in the industry.

Talking in terms of the industry, salary represented approximately 91% of total compensation out of all the companies we analyzed, while other remuneration made up 8.8% of the pie. Our data reveals that Eduspec Holdings 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.

A Look at Eduspec Holdings Berhad's Growth Numbers

Eduspec Holdings Berhad's earnings per share (EPS) grew 4.6% per year over the last three years. Its revenue is down 71% over the previous year.

We would prefer it if there was revenue growth, but the modest EPSgrowth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Eduspec Holdings Berhad Been A Good Investment?

With a three year total loss of 91% for the shareholders, Eduspec Holdings Berhad would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Een is compensated close to the median for companies of its size, and which belong to the same industry. This doesn't look good when you place it against the backdrop of negative shareholder returns and flat EPS growth. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Een deserves 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 5 warning signs (and 3 which are a bit concerning) in Eduspec Holdings Berhad we think you should know about.

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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