The CEO Of Genetec Technology Berhad (KLSE:GENETEC) Might See A Pay Rise On The Horizon

The decent performance at Genetec Technology Berhad (KLSE:GENETEC) recently will please most shareholders as they go into the AGM coming up on 15 September 2021. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

See our latest analysis for Genetec Technology Berhad

How Does Total Compensation For Kem Chin Compare With Other Companies In The Industry?

Our data indicates that Genetec Technology Berhad has a market capitalization of RM1.6b, and total annual CEO compensation was reported as RM553k for the year to March 2021. We note that's a decrease of 48% compared to last year. In particular, the salary of RM464.4k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between RM831m and RM3.3b had a median total CEO compensation of RM927k. Accordingly, Genetec Technology Berhad pays its CEO under the industry median. What's more, Kem Chin holds RM127m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	RM464k	RM840k	84%
Other	RM89k	RM234k	16%
Total Compensation	RM553k	RM1.1m	100%

Speaking on an industry level, nearly 87% of total compensation represents salary, while the remainder of 13% is other remuneration. Our data reveals that Genetec Technology 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.

A Look at Genetec Technology Berhad's Growth Numbers

Genetec Technology Berhad has reduced its earnings per share by 6.8% a year over the last three years. Its revenue is up 66% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Genetec Technology Berhad Been A Good Investment?

We think that the total shareholder return of 1,894%, over three years, would leave most Genetec Technology Berhad shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

The company's overall performance, while not bad, could be better. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which shouldn't be ignored) in Genetec Technology Berhad we think you should know about.

Switching gears from Genetec Technology 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. 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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