How Does United Plantations Berhad's (KLSE:UTDPLT) CEO Pay Compare With Company Performance?

Carl Bek-Nielsen became the CEO of United Plantations Berhad (KLSE:UTDPLT) in 2013, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for United Plantations Berhad.

View our latest analysis for United Plantations Berhad

Comparing United Plantations Berhad's CEO Compensation With the industry

At the time of writing, our data shows that United Plantations Berhad has a market capitalization of RM6.0b, and reported total annual CEO compensation of RM2.2m for the year to December 2019. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at RM246k.

In comparison with other companies in the industry with market capitalizations ranging from RM4.1b to RM13b, the reported median CEO total compensation was RM1.1m. Accordingly, our analysis reveals that United Plantations Berhad pays Carl Bek-Nielsen north of the industry median. Furthermore, Carl Bek-Nielsen directly owns RM76m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 76% of total compensation represents salary and 24% is other remuneration. In United Plantations Berhad's case, non-salary compensation represents a greater slice of total remuneration, 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 United Plantations Berhad's Growth Numbers

United Plantations Berhad has reduced its earnings per share by 2.0% a year over the last three years. Its revenue is up 4.0% over the last year.

The lack of EPS growth is certainly unimpressive. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet 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 United Plantations Berhad Been A Good Investment?

With a total shareholder return of 22% over three years, United Plantations Berhad shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As we noted earlier, United Plantations Berhad pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, EPS has not grown in three years, failing to impress us. And while shareholder returns have been respectable, they have hardly been superb. So you can understand why we do not think CEO compensation is particularly modest!

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for United Plantations Berhad that investors should think about before committing capital to this stock.

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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