Here's What We Learned About The CEO Pay At Nylex (Malaysia) Berhad (KLSE:NYLEX)

This article will reflect on the compensation paid to Ka Wei Siew who has served as CEO of Nylex (Malaysia) Berhad (KLSE:NYLEX) since 2002. This analysis will also assess whether Nylex (Malaysia) Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Nylex (Malaysia) Berhad

Comparing Nylex (Malaysia) Berhad's CEO Compensation With the industry

At the time of writing, our data shows that Nylex (Malaysia) Berhad has a market capitalization of RM107m, and reported total annual CEO compensation of RM927k for the year to May 2020. Notably, that's a decrease of 67% over the year before. Notably, the salary which is RM899.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under RM817m, the reported median total CEO compensation was RM737k. From this we gather that Ka Wei Siew is paid around the median for CEOs in the industry. What's more, Ka Wei Siew holds RM2.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. Investors will find it interesting that Nylex (Malaysia) Berhad pays the bulk of its rewards through a traditional salary, instead of 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.

Nylex (Malaysia) Berhad's Growth

Over the last three years, Nylex (Malaysia) Berhad has shrunk its earnings per share by 114% per year. In the last year, its revenue is down 27%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Nylex (Malaysia) Berhad Been A Good Investment?

With a three year total loss of 21% for the shareholders, Nylex (Malaysia) Berhad would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Ka Wei receives almost all of their compensation through a salary. As we touched on above, Nylex (Malaysia) 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. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

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 3 warning signs for Nylex (Malaysia) Berhad (1 doesn't sit too well with us!) 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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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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