This Is Why Shareholders Will Hold Back On A Pay Rise For Perusahaan Sadur Timah Malaysia (Perstima) Berhad's (KLSE:PERSTIM) CEO This Year

CEO Hiroaki Yano has done a decent job of delivering relatively good performance at Perusahaan Sadur Timah Malaysia (Perstima) Berhad (KLSE:PERSTIM) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 21 September 2021. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Perusahaan Sadur Timah Malaysia (Perstima) Berhad

How Does Total Compensation For Hiroaki Yano Compare With Other Companies In The Industry?

Our data indicates that Perusahaan Sadur Timah Malaysia (Perstima) Berhad has a market capitalization of RM540m, and total annual CEO compensation was reported as RM699k for the year to March 2021. That is, the compensation was roughly the same as last year. Notably, the salary which is RM507.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below RM830m, reported a median total CEO compensation of RM711k. So it looks like Perusahaan Sadur Timah Malaysia (Perstima) Berhad compensates Hiroaki Yano in line with the median for the industry.

Component	2021	2020	Proportion (2021)
Salary	RM507k	RM489k	73%
Other	RM192k	RM192k	27%
Total Compensation	RM699k	RM681k	100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. Our data reveals that Perusahaan Sadur Timah Malaysia (Perstima) Berhad allocates salary more or less in line with the wider market. 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.

A Look at Perusahaan Sadur Timah Malaysia (Perstima) Berhad's Growth Numbers

Perusahaan Sadur Timah Malaysia (Perstima) Berhad has seen its earnings per share (EPS) increase by 29% a year over the past three years. In the last year, its revenue is down 3.2%.

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 Perusahaan Sadur Timah Malaysia (Perstima) Berhad Been A Good Investment?

Perusahaan Sadur Timah Malaysia (Perstima) Berhad has generated a total shareholder return of 2.4% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 2 which shouldn't be ignored) in Perusahaan Sadur Timah Malaysia (Perstima) Berhad we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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