What Does Yoong Onn Corporation Berhad's (KLSE:YOCB) CEO Pay Reveal?

Roland Chew is the CEO of Yoong Onn Corporation Berhad (KLSE:YOCB), 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 Yoong Onn Corporation Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Yoong Onn Corporation Berhad

How Does Total Compensation For Roland Chew Compare With Other Companies In The Industry?

At the time of writing, our data shows that Yoong Onn Corporation Berhad has a market capitalization of RM155m, and reported total annual CEO compensation of RM785k for the year to June 2020. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is RM614.5k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below RM808m, reported a median total CEO compensation of RM97k. This suggests that Roland Chew is paid more than the median for the industry.

Talking in terms of the industry, salary represented approximately 100% of total compensation out of all the companies we analyzed, while other remuneration made up 0.3% of the pie. It's interesting to note that Yoong Onn Corporation Berhad allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Yoong Onn Corporation Berhad's Growth

Over the last three years, Yoong Onn Corporation Berhad has shrunk its earnings per share by 3.1% per year. Its revenue is down 18% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Yoong Onn Corporation Berhad Been A Good Investment?

Yoong Onn Corporation Berhad has not done too badly by shareholders, with a total return of 0.9%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As previously discussed, Roland is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, EPS has not grown in three years, failing to impress us. While shareholder returns are acceptable, they don't delight. So you may want to delve deeper, because we don't think the amount Roland makes is justifiable.

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. In our study, we found 3 warning signs for Yoong Onn Corporation Berhad you should be aware of, and 1 of them is a bit unpleasant.

Important note: Yoong Onn 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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