How Is N2N Connect Berhad's (KLSE:N2N) CEO Paid Relative To Peers?

Simply Wall St
October 26, 2020

The CEO of N2N Connect Berhad (KLSE:N2N) is Andrew Tiang, 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 N2N Connect Berhad.

See our latest analysis for N2N Connect Berhad

Comparing N2N Connect Berhad's CEO Compensation With the industry

Our data indicates that N2N Connect Berhad has a market capitalization of RM399m, and total annual CEO compensation was reported as RM279k for the year to December 2019. That's a notable increase of 25% on last year. We note that the salary portion, which stands at RM175.8k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below RM832m, we found that the median total CEO compensation was RM197k. Accordingly, our analysis reveals that N2N Connect Berhad pays Andrew Tiang north of the industry median. Moreover, Andrew Tiang also holds RM12m worth of N2N Connect Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20192018Proportion (2019)
Salary RM176k RM141k 63%
Other RM103k RM82k 37%
Total CompensationRM279k RM223k100%

On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. N2N Connect Berhad sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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.

KLSE:N2N CEO Compensation October 26th 2020

N2N Connect Berhad's Growth

Over the last three years, N2N Connect Berhad has shrunk its earnings per share by 8.3% per year. In the last year, its revenue changed by just 0.03%.

Few shareholders would be pleased to read that EPS have declined. And the flat revenue hardly impresses. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has N2N Connect Berhad Been A Good Investment?

With a three year total loss of 27% for the shareholders, N2N Connect Berhad would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Andrew is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for N2N Connect Berhad that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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