What We Learned About ENRA Group Berhad's (KLSE:ENRA) CEO Pay

Mazlin Bin Md Junid became the CEO of ENRA Group Berhad (KLSE:ENRA) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. 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 ENRA Group Berhad

How Does Total Compensation For Mazlin Bin Md Junid Compare With Other Companies In The Industry?

According to our data, ENRA Group Berhad has a market capitalization of RM78m, and paid its CEO total annual compensation worth RM836k over the year to March 2020. That's a notable decrease of 18% on last year. In particular, the salary of RM491.0k, 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 RM809m, reported a median total CEO compensation of RM803k. This suggests that ENRA Group Berhad remunerates its CEO largely in line with the industry average. Moreover, Mazlin Bin Md Junid also holds RM8.1m worth of ENRA Group Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 83% of total compensation represents salary and 17% is other remuneration. It's interesting to note that ENRA Group 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.

ENRA Group Berhad's Growth

Over the last three years, ENRA Group Berhad has shrunk its earnings per share by 65% per year. Its revenue is up 25% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 ENRA Group Berhad Been A Good Investment?

With a three year total loss of 78% for the shareholders, ENRA Group Berhad would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, ENRA Group Berhad pays its CEO in line with similar-sized companies belonging to the same industry. However, revenues have increased over the past year, a positive sign for the company. In contrast, over the same time span, shareholder returns are negative. EPS growth is bleak as well, adding fuel to the fire. We'd say CEO compensation isn't unfair, but shareholders may be wary of a bump in pay before the company substantially improves overall performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 4 warning signs (and 1 which is concerning) in ENRA Group Berhad we think you should know about.

Important note: ENRA Group 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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