Here's What We Learned About The CEO Pay At BCB Berhad (KLSE:BCB)

Seng Tan is the CEO of BCB Berhad (KLSE:BCB), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether BCB Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for BCB Berhad

How Does Total Compensation For Seng Tan Compare With Other Companies In The Industry?

Our data indicates that BCB Berhad has a market capitalization of RM126m, and total annual CEO compensation was reported as RM705k for the year to June 2020. Notably, that's a decrease of 13% over the year before. We note that the salary portion, which stands at RM651.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under RM809m, the reported median total CEO compensation was RM803k. So it looks like BCB Berhad compensates Seng Tan in line with the median for the industry.

Talking in terms of the industry, salary represented approximately 83% of total compensation out of all the companies we analyzed, while other remuneration made up 17% of the pie. According to our research, BCB Berhad has allocated a higher percentage of pay to salary in comparison to the wider 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 BCB Berhad's Growth Numbers

Over the past three years, BCB Berhad has seen its earnings per share (EPS) grow by 5.7% per year. Its revenue is down 48% over the previous year.

We generally like to see a little revenue growth, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 BCB Berhad Been A Good Investment?

Given the total shareholder loss of 26% over three years, many shareholders in BCB Berhad are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Seng is compensated close to the median for companies of its size, and which belong to the same industry. This doesn't look good when you place it against the backdrop of negative shareholder returns and flat EPS growth. CEO pay isn't exceptionally high, but considering poor performance, shareholders will likely hold off support for a raise until results improve.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for BCB Berhad (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

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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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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