How Much Is YKGI Holdings Berhad (KLSE:YKGI) Paying Its CEO?

This article will reflect on the compensation paid to Victor Hii who has served as CEO of YKGI Holdings Berhad (KLSE:YKGI) since 2017. 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 YKGI Holdings Berhad

How Does Total Compensation For Victor Hii Compare With Other Companies In The Industry?

Our data indicates that YKGI Holdings Berhad has a market capitalization of RM99m, and total annual CEO compensation was reported as RM1.0m for the year to December 2019. That is, the compensation was roughly the same as last year. In particular, the salary of RM585.7k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below RM810m, reported a median total CEO compensation of RM746k. This suggests that Victor Hii is paid more than the median for the industry. Moreover, Victor Hii also holds RM1.3m worth of YKGI Holdings Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. It's interesting to note that YKGI Holdings Berhad allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at YKGI Holdings Berhad's Growth Numbers

YKGI Holdings Berhad's earnings per share (EPS) grew 19% per year over the last three years. Its revenue is down 11% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in 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 YKGI Holdings Berhad Been A Good Investment?

Most shareholders would probably be pleased with YKGI Holdings Berhad for providing a total return of 38% 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.

To Conclude...

As previously discussed, Victor is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, YKGI Holdings Berhad has produced strong EPS growth and shareholder returns over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. Given the strong history of shareholder returns, the shareholders are probably very happy with Victor's performance.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for YKGI Holdings Berhad that investors should look into moving forward.

Important note: YKGI Holdings Berhad is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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