Here's What We Think About Solid Automotive Berhad's (KLSE:SOLID) CEO Pay

The CEO of Solid Automotive Berhad (KLSE:SOLID) is Min Ker, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Solid Automotive Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Solid Automotive Berhad

Comparing Solid Automotive Berhad's CEO Compensation With the industry

Our data indicates that Solid Automotive Berhad has a market capitalization of RM107m, and total annual CEO compensation was reported as RM594k for the year to April 2020. Notably, that's a decrease of 23% over the year before. In particular, the salary of RM490.2k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below RM813m, we found that the median total CEO compensation was RM87k. This suggests that Min Ker is paid more than the median for the industry. What's more, Min Ker holds RM33m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 100% of total compensation represents salary and 0.1% is other remuneration. Solid Automotive Berhad pays a modest slice of remuneration through salary, as compared to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Solid Automotive Berhad's Growth Numbers

Over the last three years, Solid Automotive Berhad has shrunk its earnings per share by 90% per year. In the last year, its revenue is up 23%.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is 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 Solid Automotive Berhad Been A Good Investment?

Given the total shareholder loss of 34% over three years, many shareholders in Solid Automotive Berhad are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Min is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. It concerns us that EPS growth for the company is negative, while share price gains did not materialize over the last three years. On a more positive note, the company has produced a more positive revenue growth more recently. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves.

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 identified 3 warning signs for Solid Automotive Berhad (1 is potentially serious!) that you should be aware of before investing here.

Switching gears from Solid Automotive Berhad, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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