Here's Why Shareholders May Want To Be Cautious With Increasing Genting Malaysia Berhad's (KLSE:GENM) CEO Pay Packet

editorial-team@simplywallst.com (Simply Wall St)

5 June 2024 at 6:14 pm·3-min read

Key Insights

Genting Malaysia Berhad's Annual General Meeting to take place on 12th of June
CEO Kok Lim's total compensation includes salary of RM31.1m
The overall pay is 1,691% above the industry average
Genting Malaysia Berhad's EPS grew by 101% over the past three years while total shareholder return over the past three years was 2.3%

CEO Kok Lim has done a decent job of delivering relatively good performance at Genting Malaysia Berhad (KLSE:GENM) recently. As shareholders go into the upcoming AGM on 12th of June, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Genting Malaysia Berhad

How Does Total Compensation For Kok Lim Compare With Other Companies In The Industry?

At the time of writing, our data shows that Genting Malaysia Berhad has a market capitalization of RM15b, and reported total annual CEO compensation of RM48m for the year to December 2023. That's a notable decrease of 19% on last year. In particular, the salary of RM31.1m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Malaysian Hospitality industry with market capitalizations ranging between RM9.4b and RM30b had a median total CEO compensation of RM2.7m. Hence, we can conclude that Kok Lim is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	RM31m	RM30m	66%
Other	RM16m	RM29m	34%
Total Compensation	RM48m	RM59m	100%

Speaking on an industry level, nearly 72% of total compensation represents salary, while the remainder of 28% is other remuneration. Our data reveals that Genting Malaysia 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.

Genting Malaysia Berhad's Growth

Genting Malaysia Berhad has seen its earnings per share (EPS) increase by 101% a year over the past three years. Its revenue is up 16% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Genting Malaysia Berhad Been A Good Investment?

With a total shareholder return of 2.3% over three years, Genting Malaysia Berhad has done okay by shareholders, but there's always room for improvement. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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 Genting Malaysia Berhad that you should be aware of before investing.

Important note: Genting Malaysia 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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Key Insights

How Does Total Compensation For Kok Lim Compare With Other Companies In The Industry?

Genting Malaysia Berhad's Growth

Has Genting Malaysia Berhad Been A Good Investment?

In Summary...

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