What Can We Make Of See Hup Consolidated Berhad's (KLSE:SEEHUP) CEO Compensation?

Chor Lee became the CEO of See Hup Consolidated Berhad (KLSE:SEEHUP) in 2008, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for See Hup Consolidated Berhad.

See our latest analysis for See Hup Consolidated Berhad

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

According to our data, See Hup Consolidated Berhad has a market capitalization of RM72m, and paid its CEO total annual compensation worth RM587k over the year to March 2020. We note that's a small decrease of 4.6% on last year. We note that the salary portion, which stands at RM499.5k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below RM818m, reported a median total CEO compensation of RM706k. So it looks like See Hup Consolidated Berhad compensates Chor Lee in line with the median for the industry. What's more, Chor Lee holds RM990k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. There isn't a significant difference between See Hup Consolidated Berhad and the broader market, in terms of salary allocation in the overall compensation package. 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 See Hup Consolidated Berhad's Growth Numbers

Over the last three years, See Hup Consolidated Berhad has shrunk its earnings per share by 78% per year. It saw its revenue drop 10% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has See Hup Consolidated Berhad Been A Good Investment?

Since shareholders would have lost about 5.4% over three years, some See Hup Consolidated Berhad investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, See Hup Consolidated Berhad pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for See Hup Consolidated Berhad you should be aware of, and 1 of them makes us a bit uncomfortable.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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