Stock Analysis

Key Things To Understand About Hai-O Enterprise Berhad's (KLSE:HAIO) CEO Pay Cheque

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Keng Tan has been the CEO of Hai-O Enterprise Berhad (KLSE:HAIO) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Hai-O Enterprise Berhad.

See our latest analysis for Hai-O Enterprise Berhad

Comparing Hai-O Enterprise Berhad's CEO Compensation With the industry

Our data indicates that Hai-O Enterprise Berhad has a market capitalization of RM623m, and total annual CEO compensation was reported as RM580k for the year to April 2020. That's a notable decrease of 11% on last year. In particular, the salary of RM482.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from RM404m to RM1.6b, the reported median CEO total compensation was RM2.0m. In other words, Hai-O Enterprise Berhad pays its CEO lower than the industry median. What's more, Keng Tan holds RM27m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary RM482k RM514k 83%
Other RM98k RM135k 17%
Total CompensationRM580k RM649k100%

On an industry level, around 83% of total compensation represents salary and 17% is other remuneration. Our data reveals that Hai-O Enterprise Berhad allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
KLSE:HAIO CEO Compensation January 25th 2021

Hai-O Enterprise Berhad's Growth

Hai-O Enterprise Berhad has reduced its earnings per share by 20% a year over the last three years. Its revenue is down 11% over the previous year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. 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?

Since shareholders would have lost about 53% over three years, some Hai-O Enterprise Berhad investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, Hai-O Enterprise Berhad pays its CEO lower than the norm for similar-sized companies belonging to the same industry. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. It's tough to say that Keng is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Hai-O Enterprise Berhad that you should be aware of before investing.

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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