A Look At Yong Tai Berhad's (KLSE:YONGTAI) CEO Remuneration

This article will reflect on the compensation paid to Kuang Boo who has served as CEO of Yong Tai Berhad (KLSE:YONGTAI) since 2016. This analysis will also assess whether Yong Tai Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Yong Tai Berhad

How Does Total Compensation For Kuang Boo Compare With Other Companies In The Industry?

At the time of writing, our data shows that Yong Tai Berhad has a market capitalization of RM380m, and reported total annual CEO compensation of RM1.4m for the year to June 2020. That's a fairly small increase of 3.1% over the previous year. Notably, the salary which is RM900.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under RM812m, the reported median total CEO compensation was RM802k. Accordingly, our analysis reveals that Yong Tai Berhad pays Kuang Boo north of the industry median. Furthermore, Kuang Boo directly owns RM20m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 80% of total compensation represents salary and 20% is other remuneration. Yong Tai Berhad sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Yong Tai Berhad's Growth

Over the last three years, Yong Tai Berhad has shrunk its earnings per share by 87% per year. It saw its revenue drop 44% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Yong Tai Berhad Been A Good Investment?

With a three year total loss of 73% for the shareholders, Yong Tai Berhad would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Kuang is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 5 warning signs (and 1 which is potentially serious) in Yong Tai Berhad we think you should know about.

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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