How Much Did Scicom (MSC) Berhad's (KLSE:SCICOM) CEO Pocket Last Year?

The CEO of Scicom (MSC) Berhad (KLSE:SCICOM) is Leo Ariyanayakam, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Scicom (MSC) Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Scicom (MSC) Berhad

How Does Total Compensation For Leo Ariyanayakam Compare With Other Companies In The Industry?

Our data indicates that Scicom (MSC) Berhad has a market capitalization of RM409m, and total annual CEO compensation was reported as RM1.2m for the year to June 2020. That's a notable decrease of 19% on last year. In particular, the salary of RM954.4k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below RM806m, reported a median total CEO compensation of RM663k. This suggests that Leo Ariyanayakam is paid more than the median for the industry. Furthermore, Leo Ariyanayakam directly owns RM105m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 76% of total compensation represents salary and 24% is other remuneration. Although there is a difference in how total compensation is set, Scicom (MSC) Berhad more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Scicom (MSC) Berhad's Growth Numbers

Scicom (MSC) Berhad has reduced its earnings per share by 20% a year over the last three years. Its revenue is up 8.8% over the last year.

Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Scicom (MSC) Berhad Been A Good Investment?

Given the total shareholder loss of 29% over three years, many shareholders in Scicom (MSC) Berhad are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Scicom (MSC) Berhad pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Scicom (MSC) Berhad that investors should be aware of in a dynamic business environment.

Switching gears from Scicom (MSC) 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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