How Much Did Handal Energy Berhad's (KLSE:HANDAL) CEO Pocket Last Year?

Sunildeep Dhaliwal has been the CEO of Handal Energy Berhad (KLSE:HANDAL) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Handal Energy Berhad.

See our latest analysis for Handal Energy Berhad

Comparing Handal Energy Berhad's CEO Compensation With the industry

At the time of writing, our data shows that Handal Energy Berhad has a market capitalization of RM49m, and reported total annual CEO compensation of RM1.1m for the year to June 2020. That's a notable increase of 49% on last year. Notably, the salary which is RM1.10m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below RM806m, reported a median total CEO compensation of RM1.4m. From this we gather that Sunildeep Dhaliwal is paid around the median for CEOs in the industry. What's more, Sunildeep Dhaliwal holds RM4.0m 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 82% of total compensation out of all the companies we analyzed, while other remuneration made up 18% of the pie. Investors will find it interesting that Handal Energy Berhad pays the bulk of its rewards through a traditional salary, instead of 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.

Handal Energy Berhad's Growth

Over the last three years, Handal Energy Berhad has shrunk its earnings per share by 47% per year. Its revenue is up 13% over the last year.

Overall this is not a very positive result for shareholders. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. 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 Handal Energy Berhad Been A Good Investment?

With a three year total loss of 10.0% for the shareholders, Handal Energy Berhad would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Sunildeep receives almost all of their compensation through a salary. As we noted earlier, Handal Energy Berhad pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for 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.

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 Handal Energy Berhad (of which 2 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Handal Energy 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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