What Did Focus Lumber Berhad's (KLSE:FLBHD) CEO Take Home Last Year?

Hao Wen Lin has been the CEO of Focus Lumber Berhad (KLSE:FLBHD) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Focus Lumber Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Focus Lumber Berhad

How Does Total Compensation For Hao Wen Lin Compare With Other Companies In The Industry?

Our data indicates that Focus Lumber Berhad has a market capitalization of RM87m, and total annual CEO compensation was reported as RM723k for the year to December 2019. We note that's a decrease of 16% compared to last year. Notably, the salary which is RM704.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under RM812m, the reported median total CEO compensation was RM526k. Hence, we can conclude that Hao Wen Lin is remunerated higher than the industry median. Moreover, Hao Wen Lin also holds RM8.1m worth of Focus Lumber Berhad 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 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. Investors will find it interesting that Focus Lumber Berhad pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Focus Lumber Berhad's Growth

Over the last three years, Focus Lumber Berhad has shrunk its earnings per share by 69% per year. Its revenue is down 37% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Focus Lumber Berhad Been A Good Investment?

With a three year total loss of 18% for the shareholders, Focus Lumber Berhad would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Focus Lumber Berhad pays its CEO a majority of compensation through a salary. As previously discussed, Hao Wen is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Focus Lumber Berhad (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

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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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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