What We Learned About Xian Leng Holdings Berhad's (KLSE:XIANLNG) CEO Compensation

This article will reflect on the compensation paid to Kai Kuan who has served as CEO of Xian Leng Holdings Berhad (KLSE:XIANLNG) since 2014. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Xian Leng Holdings Berhad

How Does Total Compensation For Kai Kuan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Xian Leng Holdings Berhad has a market capitalization of RM53m, and reported total annual CEO compensation of RM304k for the year to January 2020. That's a fairly small increase of 6.9% over the previous year. We note that the salary portion, which stands at RM252.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below RM812m, we found that the median total CEO compensation was RM648k. That is to say, Kai Kuan is paid under the industry median.

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. Xian Leng Holdings Berhad is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

Xian Leng Holdings Berhad's Growth

Over the last three years, Xian Leng Holdings Berhad has shrunk its earnings per share by 63% per year. Its revenue is up 103% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Xian Leng Holdings Berhad Been A Good Investment?

Xian Leng Holdings Berhad has served shareholders reasonably well, with a total return of 18% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As we noted earlier, Xian Leng Holdings Berhad pays its CEO lower than the norm for similar-sized companies belonging to the same industry. And revenue growth for the company is showing some positive trends.And revenues are growing at a healthy clip.And revenues are increasing at a good pace over the past year. However, shareholder returns, in comparison, did not strike us as that impressive, whileEPS growth was negative — a worrying sign. We won't say CEO compensation is inappropriate, but shareholders will likely want to see healthier returns before they agree the company deserves a raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for Xian Leng Holdings Berhad that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

If you decide to trade Xian Leng Holdings Berhad, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.