What Can We Make Of Trio-Tech International's (NYSEMKT:TRT) CEO Compensation?

Siew Yong has been the CEO of Trio-Tech International (NYSEMKT:TRT) since 1990, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Trio-Tech International.

See our latest analysis for Trio-Tech International

Comparing Trio-Tech International's CEO Compensation With the industry

At the time of writing, our data shows that Trio-Tech International has a market capitalization of US$14m, and reported total annual CEO compensation of US$402k for the year to June 2020. We note that's a decrease of 12% compared to last year. Notably, the salary which is US$262.1k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$480k. From this we gather that Siew Yong is paid around the median for CEOs in the industry. Furthermore, Siew Yong directly owns US$1.9m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. Trio-Tech International pays out 65% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Trio-Tech International's Growth

Over the last three years, Trio-Tech International has shrunk its earnings per share by 25% per year. In the last year, its revenue is down 19%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Trio-Tech International Been A Good Investment?

Since shareholders would have lost about 44% over three years, some Trio-Tech International investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Siew is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Trio-Tech International that you should be aware of before investing.

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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