What Can We Learn About P.A. Resources Berhad's (KLSE:PA) CEO Compensation?

Kuan Lau became the CEO of P.A. Resources Berhad (KLSE:PA) in 2017, 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 P.A. Resources Berhad

Comparing P.A. Resources Berhad's CEO Compensation With the industry

At the time of writing, our data shows that P.A. Resources Berhad has a market capitalization of RM386m, and reported total annual CEO compensation of RM608k for the year to June 2020. That's a modest increase of 6.1% on the prior year. We note that the salary portion, which stands at RM486.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below RM812m, we found that the median total CEO compensation was RM713k. This suggests that P.A. Resources Berhad remunerates its CEO largely in line with the industry average. Moreover, Kuan Lau also holds RM18m worth of P.A. Resources Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. P.A. Resources Berhad is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

P.A. Resources Berhad's Growth

P.A. Resources Berhad has seen its earnings per share (EPS) increase by 114% a year over the past three years. In the last year, its revenue is up 35%.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 P.A. Resources Berhad Been A Good Investment?

Most shareholders would probably be pleased with P.A. Resources Berhad for providing a total return of 218% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As we noted earlier, P.A. Resources Berhad pays its CEO in line with similar-sized companies belonging to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.

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. That's why we did some digging and identified 2 warning signs for P.A. Resources Berhad that investors should think about before committing capital to this stock.

Switching gears from P.A. Resources 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.

If you decide to trade P.A. Resources Berhad, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.