We Think Shareholders May Want To Consider A Review Of Kim Hin Industry Berhad's (KLSE:KIMHIN) CEO Compensation Package

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

23 May 2024 at 6:46 pm·3-min read

Key Insights

Kim Hin Industry Berhad to hold its Annual General Meeting on 30th of May
CEO John Chua's total compensation includes salary of RM1.02m
The overall pay is 267% above the industry average
Over the past three years, Kim Hin Industry Berhad's EPS fell by 32% and over the past three years, the total loss to shareholders 40%

The results at Kim Hin Industry Berhad (KLSE:KIMHIN) have been quite disappointing recently and CEO John Chua bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 30th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Kim Hin Industry Berhad

How Does Total Compensation For John Chua Compare With Other Companies In The Industry?

At the time of writing, our data shows that Kim Hin Industry Berhad has a market capitalization of RM73m, and reported total annual CEO compensation of RM1.3m for the year to December 2023. Notably, that's a decrease of 11% over the year before. Notably, the salary which is RM1.02m, represents most of the total compensation being paid.

On comparing similar-sized companies in the Malaysia Building industry with market capitalizations below RM942m, we found that the median total CEO compensation was RM349k. This suggests that John Chua is paid more than the median for the industry. Furthermore, John Chua directly owns RM273k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	RM1.0m	RM1.2m	80%
Other	RM263k	RM288k	20%
Total Compensation	RM1.3m	RM1.4m	100%

On an industry level, around 80% of total compensation represents salary and 20% is other remuneration. Kim Hin Industry Berhad is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

A Look at Kim Hin Industry Berhad's Growth Numbers

Kim Hin Industry Berhad has reduced its earnings per share by 32% a year over the last three years. It saw its revenue drop 8.8% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Kim Hin Industry Berhad Been A Good Investment?

The return of -40% over three years would not have pleased Kim Hin Industry Berhad shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Kim Hin Industry Berhad that investors should look into moving forward.

Switching gears from Kim Hin Industry Berhad, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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 John Chua Compare With Other Companies In The Industry?

A Look at Kim Hin Industry Berhad's Growth Numbers

Has Kim Hin Industry Berhad Been A Good Investment?

In Summary...

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