Key Things To Understand About Bahvest Resources Berhad's (KLSE:BAHVEST) CEO Pay Cheque

Fui Lo has been the CEO of Bahvest Resources Berhad (KLSE:BAHVEST) since 2005, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Bahvest Resources Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Bahvest Resources Berhad

Comparing Bahvest Resources Berhad's CEO Compensation With the industry

At the time of writing, our data shows that Bahvest Resources Berhad has a market capitalization of RM671m, and reported total annual CEO compensation of RM673k for the year to March 2020. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth RM673k.

In comparison with other companies in the industry with market capitalizations ranging from RM405m to RM1.6b, the reported median CEO total compensation was RM961k. So it looks like Bahvest Resources Berhad compensates Fui Lo in line with the median for the industry. What's more, Fui Lo holds RM106m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 76% of total compensation represents salary and 24% is other remuneration. On a company level, Bahvest Resources Berhad prefers to reward its CEO through a salary, opting not to pay Fui Lo through 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.

Bahvest Resources Berhad's Growth

Over the last three years, Bahvest Resources Berhad has shrunk its earnings per share by 83% per year. In the last year, its revenue is down 12%.

Overall this is not a very positive result for shareholders. 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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Bahvest Resources Berhad Been A Good Investment?

With a total shareholder return of 32% over three years, Bahvest Resources Berhad shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Bahvest Resources Berhad pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Bahvest Resources Berhad pays its CEO in line with similar-sized companies belonging to the same industry. According to our analysis, Bahvest Resources Berhad is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. This doesn't compare well with CEO compensation, which is close to the industry median. Considering all of this, we can't say the CEO is underpaid, and moving forward shareholders will likely want to see higher growth to justify any raise.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Bahvest Resources Berhad that investors should look into moving forward.

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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