The CEO of KESM Industries Berhad (KLSE:KESM) is Samuel Lim, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for KESM Industries Berhad.
View our latest analysis for KESM Industries Berhad
How Does Total Compensation For Samuel Lim Compare With Other Companies In The Industry?
Our data indicates that KESM Industries Berhad has a market capitalization of RM713m, and total annual CEO compensation was reported as RM747k for the year to July 2020. This means that the compensation hasn't changed much from last year. Notably, the salary which is RM693.0k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations ranging from RM404m to RM1.6b, the reported median CEO total compensation was RM747k. So it looks like KESM Industries Berhad compensates Samuel Lim in line with the median for the industry.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | RM693k | RM672k | 93% |
| Other | RM54k | RM54k | 7% |
| Total Compensation | RM747k | RM726k | 100% |
Talking in terms of the industry, salary represented approximately 87% of total compensation out of all the companies we analyzed, while other remuneration made up 13% of the pie. KESM Industries Berhad is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.
KESM Industries Berhad's Growth
Over the last three years, KESM Industries Berhad has shrunk its earnings per share by 86% per year. Its revenue is down 23% over the previous year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has KESM Industries Berhad Been A Good Investment?
Since shareholders would have lost about 19% over three years, some KESM Industries Berhad investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As we noted earlier, KESM Industries Berhad pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
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 KESM Industries Berhad that you should be aware of before investing.
Important note: KESM Industries 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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About KLSE:KESM
KESM Industries Berhad
An investment holding company, provides burn-in and test services to semiconductor manufacturers in Malaysia, the People’s Republic of China, the United States, Europe, and rest of Asia.
Adequate balance sheet second-rate dividend payer.
