How Does Muda Holdings Berhad's (KLSE:MUDA) CEO Pay Compare With Company Performance?

Chiun Lim has been the CEO of Muda Holdings Berhad (KLSE:MUDA) since 2018, 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 Muda Holdings Berhad.

Check out our latest analysis for Muda Holdings Berhad

Comparing Muda Holdings Berhad's CEO Compensation With the industry

According to our data, Muda Holdings Berhad has a market capitalization of RM537m, and paid its CEO total annual compensation worth RM1.9m over the year to December 2019. That's just a smallish increase of 3.1% on last year. In particular, the salary of RM1.01m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below RM817m, reported a median total CEO compensation of RM783k. Hence, we can conclude that Chiun Lim is remunerated higher than the industry median. What's more, Chiun Lim holds RM1.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 74% of total compensation out of all the companies we analyzed, while other remuneration made up 26% of the pie. Muda Holdings Berhad pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Muda Holdings Berhad's Growth Numbers

Muda Holdings Berhad has seen its earnings per share (EPS) increase by 19% a year over the past three years. It saw its revenue drop 10% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Muda Holdings Berhad Been A Good Investment?

Most shareholders would probably be pleased with Muda Holdings Berhad for providing a total return of 36% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As we touched on above, Muda Holdings Berhad is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. Given the strong history of shareholder returns, the shareholders are probably very happy with Chiun's performance.

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 1 warning sign for Muda 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.

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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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