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

Rahadian bin Mohammad Khalil has been the CEO of Magna Prima Berhad (KLSE:MAGNA) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Magna Prima Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Magna Prima Berhad

Comparing Magna Prima Berhad's CEO Compensation With the industry

At the time of writing, our data shows that Magna Prima Berhad has a market capitalization of RM223m, and reported total annual CEO compensation of RM801k for the year to December 2019. This means that the compensation hasn't changed much from last year. It is worth noting that the CEO compensation consists entirely of the salary, worth RM801k.

On comparing similar-sized companies in the industry with market capitalizations below RM816m, we found that the median total CEO compensation was RM801k. This suggests that Magna Prima Berhad remunerates its CEO largely in line with the industry average. Furthermore, Rahadian bin Mohammad Khalil directly owns RM14m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 80% of total compensation represents salary and 20% is other remuneration. On a company level, Magna Prima Berhad prefers to reward its CEO through a salary, opting not to pay Rahadian bin Mohammad Khalil through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Magna Prima Berhad's Growth

Over the last three years, Magna Prima Berhad has shrunk its earnings per share by 52% per year. Its revenue is up 66% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Magna Prima Berhad Been A Good Investment?

Given the total shareholder loss of 47% over three years, many shareholders in Magna Prima Berhad are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Magna Prima Berhad rewards its CEO solely through a salary, ignoring non-salary benefits completely. As previously discussed, Rahadian is compensated close to the median for companies of its size, and which belong to the same industry. Still, the company is logging healthy revenue growth over the last year. In contrast, over the same time span, shareholder returns are negative. EPS growth is also negative, adding insult to injury. It's tough for us to say Rahadian is overpaid but a mixed bag in terms of performance will surely irk shareholders and reduce chances of a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Magna Prima Berhad you should be aware of, and 2 of them are a bit concerning.

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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