A Look At Lion Industries Corporation Berhad's (KLSE:LIONIND) CEO Remuneration

Albert Cheng became the CEO of Lion Industries Corporation Berhad (KLSE:LIONIND) in 1995, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Lion Industries Corporation Berhad

How Does Total Compensation For Albert Cheng Compare With Other Companies In The Industry?

Our data indicates that Lion Industries Corporation Berhad has a market capitalization of RM585m, and total annual CEO compensation was reported as RM1.1m for the year to June 2020. Notably, that's a decrease of 8.0% over the year before. Notably, the salary which is RM818.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under RM808m, the reported median total CEO compensation was RM681k. Accordingly, our analysis reveals that Lion Industries Corporation Berhad pays Albert Cheng north of the industry median. Furthermore, Albert Cheng directly owns RM10m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. Our data reveals that Lion Industries Corporation 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 Lion Industries Corporation Berhad's Growth Numbers

Lion Industries Corporation Berhad has reduced its earnings per share by 105% a year over the last three years. In the last year, its revenue is down 18%.

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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Lion Industries Corporation Berhad Been A Good Investment?

Since shareholders would have lost about 36% over three years, some Lion Industries Corporation Berhad investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, Albert 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. What's equally worrying is that the company isn't growing by our analysis. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

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. We've identified 1 warning sign for Lion Industries Corporation Berhad that investors should be aware of in a dynamic business environment.

Important note: Lion Industries Corporation Berhad is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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