How Much Is Shangri-La Hotels (Malaysia) Berhad (KLSE:SHANG) CEO Getting Paid?

Kay Kuok became the CEO of Shangri-La Hotels (Malaysia) Berhad (KLSE:SHANG) in 1998, 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 Shangri-La Hotels (Malaysia) Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Shangri-La Hotels (Malaysia) Berhad

Comparing Shangri-La Hotels (Malaysia) Berhad's CEO Compensation With the industry

At the time of writing, our data shows that Shangri-La Hotels (Malaysia) Berhad has a market capitalization of RM1.7b, and reported total annual CEO compensation of RM1.3m for the year to December 2019. That's just a smallish increase of 3.7% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at RM540k.

In comparison with other companies in the industry with market capitalizations ranging from RM811m to RM3.2b, the reported median CEO total compensation was RM1.2m. From this we gather that Kay Kuok is paid around the median for CEOs in the industry.

Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. It's interesting to note that Shangri-La Hotels (Malaysia) Berhad allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Shangri-La Hotels (Malaysia) Berhad's Growth Numbers

Shangri-La Hotels (Malaysia) Berhad has reduced its earnings per share by 46% a year over the last three years. It saw its revenue drop 50% 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Shangri-La Hotels (Malaysia) Berhad Been A Good Investment?

With a three year total loss of 14% for the shareholders, Shangri-La Hotels (Malaysia) Berhad would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, Shangri-La Hotels (Malaysia) Berhad pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Shangri-La Hotels (Malaysia) Berhad that you should be aware of before investing.

Important note: Shangri-La Hotels (Malaysia) 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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