Why Nylex (Malaysia) Berhad's (KLSE:NYLEX) CEO Pay Matters To You

Ka Wei Siew has been the CEO of Nylex (Malaysia) Berhad (KLSE:NYLEX) since 2002. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Nylex (Malaysia) Berhad

How Does Ka Wei Siew's Compensation Compare With Similar Sized Companies?

According to our data, Nylex (Malaysia) Berhad has a market capitalization of RM136m, and paid its CEO total annual compensation worth RM2.8m over the year to May 2019. It is worth noting that the CEO compensation consists almost entirely of the salary, worth RM2.7m. We examined a group of similar sized companies, with market capitalizations of below RM872m. The median CEO total compensation in that group is RM617k.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Nylex (Malaysia) Berhad stands. Talking in terms of the sector, salary represented approximately 58% of total compensation out of all the companies we analysed, while other remuneration made up 42% of the pie. Investors will find it interesting that Nylex (Malaysia) Berhad pays the bulk of its rewards through a traditional salary, instead of non-salary benefits.

Thus we can conclude that Ka Wei Siew receives more in total compensation than the median of a group of companies in the same market, and of similar size to Nylex (Malaysia) Berhad. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. The graphic below shows how CEO compensation at Nylex (Malaysia) Berhad has changed from year to year.

Is Nylex (Malaysia) Berhad Growing?

On average over the last three years, Nylex (Malaysia) Berhad has shrunk earnings per share by 81% each year (measured with a line of best fit). In the last year, its revenue is down 20%.

Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Nylex (Malaysia) Berhad Been A Good Investment?

Given the total loss of 17% over three years, many shareholders in Nylex (Malaysia) Berhad are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount Nylex (Malaysia) Berhad pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

We think many shareholders would be underwhelmed with the business growth over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! On another note, Nylex (Malaysia) Berhad has 5 warning signs (and 2 which are potentially serious) we think you should know about.

If you want to buy a stock that is better than Nylex (Malaysia) Berhad, this free list of high return, low debt companies is a great place to look.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.

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. Thank you for reading.