Yahoo Finance We Think Shareholders May Want To Consider A Review Of British American Tobacco (Malaysia) Berhad's (KLSE:BAT) CEO Compensation Package
Key Insights
British American Tobacco (Malaysia) Berhad to hold its Annual General Meeting on 8th of May
Salary of RM1.11m is part of CEO Nedal Salem's total remuneration
The overall pay is 114% above the industry average
British American Tobacco (Malaysia) Berhad's three-year loss to shareholders was 28% while its EPS was down 7.0% over the past three years
British American Tobacco (Malaysia) Berhad (KLSE:BAT) has not performed well recently and CEO Nedal Salem will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 8th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.
View our latest analysis for British American Tobacco (Malaysia) Berhad
How Does Total Compensation For Nedal Salem Compare With Other Companies In The Industry?
At the time of writing, our data shows that British American Tobacco (Malaysia) Berhad has a market capitalization of RM2.4b, and reported total annual CEO compensation of RM3.7m for the year to December 2023. We note that's an increase of 60% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at RM1.1m.
For comparison, other companies in the Malaysia Tobacco industry with market capitalizations ranging between RM954m and RM3.8b had a median total CEO compensation of RM1.7m. Hence, we can conclude that Nedal Salem is remunerated higher than the industry median.
Component | 2023 | 2022 | Proportion (2023) |
Salary | RM1.1m | RM988k | 30% |
Other | RM2.6m | RM1.3m | 70% |
Total Compensation | RM3.7m | RM2.3m | 100% |
On an industry level, around 30% of total compensation represents salary and 70% is other remuneration. There isn't a significant difference between British American Tobacco (Malaysia) Berhad and the broader market, in terms of salary allocation in the overall compensation package. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
British American Tobacco (Malaysia) Berhad's Growth
Over the last three years, British American Tobacco (Malaysia) Berhad has shrunk its earnings per share by 7.0% per year. It saw its revenue drop 9.0% over the last year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has British American Tobacco (Malaysia) Berhad Been A Good Investment?
Since shareholders would have lost about 28% over three years, some British American Tobacco (Malaysia) Berhad investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for British American Tobacco (Malaysia) Berhad 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. 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.
