What Can We Learn About Subur Tiasa Holdings Berhad's (KLSE:SUBUR) CEO Compensation?

This article will reflect on the compensation paid to Ing Tiong who has served as CEO of Subur Tiasa Holdings Berhad (KLSE:SUBUR) since 2003. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Subur Tiasa Holdings Berhad.

View our latest analysis for Subur Tiasa Holdings Berhad

Comparing Subur Tiasa Holdings Berhad's CEO Compensation With the industry

Our data indicates that Subur Tiasa Holdings Berhad has a market capitalization of RM136m, and total annual CEO compensation was reported as RM3.8m for the year to July 2020. That's a slight decrease of 4.4% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at RM1.9m.

In comparison with other companies in the industry with market capitalizations under RM804m, the reported median total CEO compensation was RM524k. Hence, we can conclude that Ing Tiong is remunerated higher than the industry median. Furthermore, Ing Tiong directly owns RM1.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. It's interesting to note that Subur Tiasa Holdings Berhad allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Subur Tiasa Holdings Berhad's Growth

Over the last three years, Subur Tiasa Holdings Berhad has shrunk its earnings per share by 14% per year. It achieved revenue growth of 1.9% over the last year.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. 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 Subur Tiasa Holdings Berhad Been A Good Investment?

With a three year total loss of 43% for the shareholders, Subur Tiasa Holdings Berhad would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Ing is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Subur Tiasa Holdings Berhad (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

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. 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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