How Much Is LB Aluminium Berhad (KLSE:LBALUM) Paying Its CEO?

Mark Wing has been the CEO of LB Aluminium Berhad (KLSE:LBALUM) since 2008, 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 LB Aluminium Berhad.

View our latest analysis for LB Aluminium Berhad

Comparing LB Aluminium Berhad's CEO Compensation With the industry

At the time of writing, our data shows that LB Aluminium Berhad has a market capitalization of RM160m, and reported total annual CEO compensation of RM746k for the year to April 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of RM567.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under RM809m, the reported median total CEO compensation was RM681k. So it looks like LB Aluminium Berhad compensates Mark Wing in line with the median for the industry. Moreover, Mark Wing also holds RM2.4m worth of LB Aluminium Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. Our data reveals that LB Aluminium Berhad allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at LB Aluminium Berhad's Growth Numbers

Over the last three years, LB Aluminium Berhad has shrunk its earnings per share by 11% per year. Its revenue is down 14% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 LB Aluminium Berhad Been A Good Investment?

LB Aluminium Berhad has not done too badly by shareholders, with a total return of 7.2%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As we touched on above, LB Aluminium Berhad is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. LB Aluminium Berhad has had a tough time in recent years, with declining EPS growth, and although shareholder returns are stable, they are hardly worth celebrating. This doesn't compare well with CEO compensation, which is close to the industry median. We would stop short of the compensation is inappropriate, but we can't say the executive is underpaid.

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. We identified 6 warning signs for LB Aluminium Berhad (2 are significant!) that you should be aware of before investing here.

Switching gears from LB Aluminium Berhad, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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