What We Learned About PWF Corporation Bhd's (KLSE:PWF) CEO Compensation

Hooi Law has been the CEO of PWF Corporation Bhd. (KLSE:PWF) 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 PWF Corporation Bhd.

View our latest analysis for PWF Corporation Bhd

How Does Total Compensation For Hooi Law Compare With Other Companies In The Industry?

At the time of writing, our data shows that PWF Corporation Bhd. has a market capitalization of RM82m, and reported total annual CEO compensation of RM1.5m for the year to December 2019. We note that's an increase of 8.0% above last year. We note that the salary portion, which stands at RM1.42m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under RM815m, the reported median total CEO compensation was RM661k. Hence, we can conclude that Hooi Law is remunerated higher than the industry median. Moreover, Hooi Law also holds RM11m worth of PWF Corporation Bhd stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 76% of total compensation out of all the companies we analyzed, while other remuneration made up 24% of the pie. Investors will find it interesting that PWF Corporation Bhd pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

PWF Corporation Bhd.'s Growth

PWF Corporation Bhd. has reduced its earnings per share by 74% a year over the last three years. It saw its revenue drop 14% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 PWF Corporation Bhd. Been A Good Investment?

With a three year total loss of 50% for the shareholders, PWF Corporation Bhd. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

PWF Corporation Bhd pays its CEO a majority of compensation through a salary. As previously discussed, Hooi is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. 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. We identified 4 warning signs for PWF Corporation Bhd (2 can't be ignored!) that you should be aware of before investing here.

Important note: PWF Corporation Bhd 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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