Stock Analysis

How Is Teo Guan Lee Corporation Berhad's (KLSE:TGL) CEO Paid Relative To Peers?

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Kian Toh is the CEO of Teo Guan Lee Corporation Berhad (KLSE:TGL), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Teo Guan Lee Corporation Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Teo Guan Lee Corporation Berhad

How Does Total Compensation For Kian Toh Compare With Other Companies In The Industry?

Our data indicates that Teo Guan Lee Corporation Berhad has a market capitalization of RM47m, and total annual CEO compensation was reported as RM446k for the year to June 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at RM375.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below RM809m, we found that the median total CEO compensation was RM447k. This suggests that Teo Guan Lee Corporation Berhad remunerates its CEO largely in line with the industry average. Furthermore, Kian Toh directly owns RM1.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary RM375k RM375k 84%
Other RM71k RM71k 16%
Total CompensationRM446k RM446k100%

On an industry level, around 86% of total compensation represents salary and 14% is other remuneration. Our data reveals that Teo Guan Lee Corporation Berhad allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

KLSE:TGL CEO Compensation February 4th 2021

Teo Guan Lee Corporation Berhad's Growth

Teo Guan Lee Corporation Berhad has seen its earnings per share (EPS) increase by 1.4% a year over the past three years. It saw its revenue drop 18% over the last year.

We generally like to see a little revenue growth, but the modest improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Teo Guan Lee Corporation Berhad Been A Good Investment?

Teo Guan Lee Corporation Berhad has generated a total shareholder return of 13% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As we touched on above, Teo Guan Lee Corporation Berhad is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company has failed to produce substantial growth in either EPS or total shareholder return. So, although the CEO compensation seems reasonable, shareholders might want to see some further progress before they agree that Kian should get a raise.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Teo Guan Lee Corporation Berhad that investors should look into moving forward.

Important note: Teo Guan Lee Corporation Berhad is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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