What Did Wah Seong Corporation Berhad's (KLSE:WASEONG) CEO Take Home Last Year?

The CEO of Wah Seong Corporation Berhad (KLSE:WASEONG) is Cheu Chan, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Wah Seong Corporation Berhad

How Does Total Compensation For Cheu Chan Compare With Other Companies In The Industry?

According to our data, Wah Seong Corporation Berhad has a market capitalization of RM379m, and paid its CEO total annual compensation worth RM3.9m over the year to December 2019. We note that's an increase of 10% above last year. Notably, the salary which is RM2.57m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below RM818m, reported a median total CEO compensation of RM1.4m. Accordingly, our analysis reveals that Wah Seong Corporation Berhad pays Cheu Chan north of the industry median. Moreover, Cheu Chan also holds RM10.0m worth of Wah Seong Corporation Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 78% of total compensation represents salary, while the remainder of 22% is other remuneration. Wah Seong Corporation Berhad sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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 Wah Seong Corporation Berhad's Growth Numbers

Wah Seong Corporation Berhad has reduced its earnings per share by 71% a year over the last three years. In the last year, its revenue is down 48%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Wah Seong Corporation Berhad Been A Good Investment?

Since shareholders would have lost about 59% over three years, some Wah Seong Corporation Berhad investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Cheu 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. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Wah Seong Corporation Berhad you should be aware of, and 1 of them is a bit unpleasant.

Important note: Wah Seong Corporation 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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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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