The Compensation For P.A. Resources Berhad's (KLSE:PA) CEO Looks Deserved And Here's Why

Simply Wall St
·3 min read

The performance at P.A. Resources Berhad (KLSE:PA) has been quite strong recently and CEO Kuan Lau has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 15 December 2022. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for P.A. Resources Berhad

Comparing P.A. Resources Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that P.A. Resources Berhad has a market capitalization of RM412m, and reported total annual CEO compensation of RM992k for the year to June 2022. We note that's an increase of 20% above last year. In particular, the salary of RM684.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below RM880m, we found that the median total CEO compensation was RM867k. This suggests that P.A. Resources Berhad remunerates its CEO largely in line with the industry average. Furthermore, Kuan Lau directly owns RM17m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2022

2021

Proportion (2022)

Salary

RM684k

RM579k

69%

Other

RM308k

RM245k

31%

Total Compensation

RM992k

RM824k

100%

On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. Our data reveals that P.A. Resources Berhad allocates salary more or less in line with the wider market. 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.

ceo-compensation
ceo-compensation

A Look at P.A. Resources Berhad's Growth Numbers

P.A. Resources Berhad has seen its earnings per share (EPS) increase by 106% a year over the past three years. It achieved revenue growth of 75% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has P.A. Resources Berhad Been A Good Investment?

Boasting a total shareholder return of 144% over three years, P.A. Resources Berhad has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for P.A. Resources Berhad (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: P.A. Resources 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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