Why Asian Pac Holdings Berhad's (KLSE:ASIAPAC) CEO Pay Matters To You

Mustapha Bin Buang is the CEO of Asian Pac Holdings Berhad (KLSE:ASIAPAC). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Asian Pac Holdings Berhad

How Does Mustapha Bin Buang's Compensation Compare With Similar Sized Companies?

According to our data, Asian Pac Holdings Berhad has a market capitalization of RM130m, and paid its CEO total annual compensation worth RM1.9m over the year to March 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at RM1.6m. We took a group of companies with market capitalizations below RM829m, and calculated the median CEO total compensation to be RM597k.

Thus we can conclude that Mustapha Bin Buang receives more in total compensation than the median of a group of companies in the same market, and of similar size to Asian Pac Holdings Berhad. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Asian Pac Holdings Berhad has changed from year to year.

Is Asian Pac Holdings Berhad Growing?

On average over the last three years, Asian Pac Holdings Berhad has grown earnings per share (EPS) by 6.5% each year (using a line of best fit). Its revenue is up 15% over last year.

I would argue that the modest growth in revenue is a notable positive. And the modest growth in earnings per share isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. 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 Asian Pac Holdings Berhad Been A Good Investment?

Given the total loss of 26% over three years, many shareholders in Asian Pac Holdings Berhad are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We examined the amount Asian Pac Holdings Berhad pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Whatever your view on compensation, you might want to check if insiders are buying or selling Asian Pac Holdings Berhad shares (free trial).

Important note: Asian Pac Holdings Berhad may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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