A Look At Digistar Corporation Berhad's (KLSE:DIGISTA) CEO Remuneration

Wira Lee became the CEO of Digistar Corporation Berhad (KLSE:DIGISTA) in 2003, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Digistar Corporation Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Digistar Corporation Berhad

How Does Total Compensation For Wira Lee Compare With Other Companies In The Industry?

At the time of writing, our data shows that Digistar Corporation Berhad has a market capitalization of RM59m, and reported total annual CEO compensation of RM972k for the year to September 2020. We note that's a decrease of 25% compared to last year. Notably, the salary of RM972k is the entirety of the CEO compensation.

For comparison, other companies in the industry with market capitalizations below RM809m, reported a median total CEO compensation of RM773k. From this we gather that Wira Lee is paid around the median for CEOs in the industry.

On an industry level, roughly 76% of total compensation represents salary and 24% is other remuneration. On a company level, Digistar Corporation Berhad prefers to reward its CEO through a salary, opting not to pay Wira Lee through non-salary benefits. 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.

Digistar Corporation Berhad's Growth

Digistar Corporation Berhad has seen its earnings per share (EPS) increase by 10% a year over the past three years. In the last year, its revenue is down 13%.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Digistar Corporation Berhad Been A Good Investment?

With a three year total loss of 38% for the shareholders, Digistar Corporation Berhad would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

Digistar Corporation Berhad rewards its CEO solely through a salary, ignoring non-salary benefits completely. As previously discussed, Wira is compensated close to the median for companies of its size, and which belong to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Overall, we wouldn't say Wira is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Digistar Corporation Berhad (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Important note: Digistar 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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