Stock Analysis

What Does Rubberex Corporation (M) Berhad's (KLSE:RUBEREX) CEO Pay Reveal?

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KLSE:HEXCARE
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This article will reflect on the compensation paid to Chin Khoo who has served as CEO of Rubberex Corporation (M) Berhad (KLSE:RUBEREX) since 2013. 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 Rubberex Corporation (M) Berhad

How Does Total Compensation For Chin Khoo Compare With Other Companies In The Industry?

According to our data, Rubberex Corporation (M) Berhad has a market capitalization of RM929m, and paid its CEO total annual compensation worth RM943k over the year to December 2019. Notably, that's an increase of 54% over the year before. Notably, the salary of RM943k is the entirety of the CEO compensation.

For comparison, other companies in the same industry with market capitalizations ranging between RM426m and RM1.7b had a median total CEO compensation of RM1.3m. This suggests that Rubberex Corporation (M) Berhad remunerates its CEO largely in line with the industry average.

Component20192018Proportion (2019)
Salary RM943k RM613k 100%
Other - - -
Total CompensationRM943k RM613k100%

On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. On a company level, Rubberex Corporation (M) Berhad prefers to reward its CEO through a salary, opting not to pay Chin Khoo through 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.

ceo-compensation
KLSE:RUBEREX CEO Compensation July 14th 2020

A Look at Rubberex Corporation (M) Berhad's Growth Numbers

Rubberex Corporation (M) Berhad has reduced its earnings per share by 7.0% a year over the last three years. Its revenue is up 15% over the last year.

The decrease in earnings could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Rubberex Corporation (M) Berhad Been A Good Investment?

We think that the total shareholder return of 365%, over three years, would leave most Rubberex Corporation (M) Berhad shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Rubberex Corporation (M) Berhad rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Rubberex Corporation (M) Berhad pays its CEO in line with similar-sized companies belonging to the same industry. Investors will be happy that Rubberex Corporation (M) Berhad has produced strong shareholder returns for the past three years. At the same time, revenues are also moving northwards at a healthy pace. On a worrying note, its important to acknowledge that EPS growth has been negative recently. However, considering overall positive performance, we think Chin, shareholders might not be too worried about the CEO's compensation.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Rubberex Corporation (M) Berhad (1 can't be ignored!) that you should be aware of before investing here.

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.

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