Increases to Prestar Resources Berhad's (KLSE:PRESTAR) CEO Compensation Might Cool off for now

Under the guidance of CEO Yew Peng Toh, Prestar Resources Berhad (KLSE:PRESTAR) has performed reasonably well 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 22 June 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Prestar Resources Berhad

Comparing Prestar Resources Berhad's CEO Compensation With the industry

Our data indicates that Prestar Resources Berhad has a market capitalization of RM243m, and total annual CEO compensation was reported as RM1.2m for the year to December 2020. Notably, that's a decrease of 22% over the year before. We note that the salary portion, which stands at RM890.1k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below RM824m, we found that the median total CEO compensation was RM681k. Accordingly, our analysis reveals that Prestar Resources Berhad pays Yew Peng Toh north of the industry median. Furthermore, Yew Peng Toh directly owns RM11m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	RM890k	RM1.1m	73%
Other	RM336k	RM522k	27%
Total Compensation	RM1.2m	RM1.6m	100%

On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. Although there is a difference in how total compensation is set, Prestar Resources Berhad more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Prestar Resources Berhad's Growth

Over the past three years, Prestar Resources Berhad has seen its earnings per share (EPS) grow by 6.3% per year. Its revenue is up 4.9% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 Prestar Resources Berhad Been A Good Investment?

Boasting a total shareholder return of 51% over three years, Prestar Resources Berhad has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

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 can't be ignored) in Prestar Resources Berhad we think you should know about.

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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