Shareholders Will Probably Hold Off On Increasing Mieco Chipboard Berhad's (KLSE:MIECO) CEO Compensation For The Time Being
Key Insights
Mieco Chipboard Berhad's Annual General Meeting to take place on 28th of May
Total pay for CEO Ah Chai Ng includes RM2.76m salary
The overall pay is 197% above the industry average
Over the past three years, Mieco Chipboard Berhad's EPS fell by 97% and over the past three years, the total shareholder return was 28%
Despite Mieco Chipboard Berhad's (KLSE:MIECO) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. The upcoming AGM on 28th of May may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
See our latest analysis for Mieco Chipboard Berhad
Comparing Mieco Chipboard Berhad's CEO Compensation With The Industry
Our data indicates that Mieco Chipboard Berhad has a market capitalization of RM680m, and total annual CEO compensation was reported as RM2.8m for the year to December 2023. We note that's a small decrease of 7.7% on last year. Notably, the salary of RM2.8m is the entirety of the CEO compensation.
In comparison with other companies in the Malaysia Forestry industry with market capitalizations under RM939m, the reported median total CEO compensation was RM930k. This suggests that Ah Chai Ng is paid more than the median for the industry. Moreover, Ah Chai Ng also holds RM428m worth of Mieco Chipboard Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | RM2.8m | RM2.8m | 100% |
Other | - | RM230k | - |
Total Compensation | RM2.8m | RM3.0m | 100% |
Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. Speaking on a company level, Mieco Chipboard Berhad prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Mieco Chipboard Berhad's Growth
Over the last three years, Mieco Chipboard Berhad has shrunk its earnings per share by 97% per year. In the last year, its revenue is up 9.3%.
Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Mieco Chipboard Berhad Been A Good Investment?
Mieco Chipboard Berhad has generated a total shareholder return of 28% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
To Conclude...
Mieco Chipboard Berhad pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Mieco Chipboard Berhad that you should be aware of before investing.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.