Stock Analysis

It Looks Like Hai-O Enterprise Berhad's (KLSE:HAIO) CEO May Expect Their Salary To Be Put Under The Microscope

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Shareholders will probably not be too impressed with the underwhelming results at Hai-O Enterprise Berhad (KLSE:HAIO) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 21 October 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Hai-O Enterprise Berhad

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

According to our data, Hai-O Enterprise Berhad has a market capitalization of RM591m, and paid its CEO total annual compensation worth RM1.0m over the year to April 2021. Notably, that's an increase of 80% over the year before. We note that the salary portion, which stands at RM945.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below RM832m, we found that the median total CEO compensation was RM397k. This suggests that Keng Tan is paid more than the median for the industry. Moreover, Keng Tan also holds RM25m worth of Hai-O Enterprise Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20212020Proportion (2021)
Salary RM945k RM482k 91%
Other RM99k RM98k 9%
Total CompensationRM1.0m RM580k100%

Talking in terms of the industry, salary represented approximately 88% of total compensation out of all the companies we analyzed, while other remuneration made up 12% of the pie. Hai-O Enterprise Berhad is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

KLSE:HAIO CEO Compensation October 14th 2021

A Look at Hai-O Enterprise Berhad's Growth Numbers

Over the last three years, Hai-O Enterprise Berhad has shrunk its earnings per share by 19% per year. Its revenue is down 4.3% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Hai-O Enterprise Berhad Been A Good Investment?

Few Hai-O Enterprise Berhad shareholders would feel satisfied with the return of -36% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Hai-O Enterprise Berhad that investors should look into moving forward.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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