Yahoo Finance It's Unlikely That Fajarbaru Builder Group Bhd.'s (KLSE:FAJAR) CEO Will See A Huge Pay Rise This Year
Key Insights
Fajarbaru Builder Group Bhd to hold its Annual General Meeting on 14th of December
Total pay for CEO Eric Kuan includes RM655.0k salary
The total compensation is 44% higher than the average for the industry
Over the past three years, Fajarbaru Builder Group Bhd's EPS fell by 94% and over the past three years, the total shareholder return was 8.6%
Under the guidance of CEO Eric Kuan, Fajarbaru Builder Group Bhd. (KLSE:FAJAR) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 14th of December. However, some shareholders may still be hesitant of being overly generous with CEO compensation.
See our latest analysis for Fajarbaru Builder Group Bhd
How Does Total Compensation For Eric Kuan Compare With Other Companies In The Industry?
According to our data, Fajarbaru Builder Group Bhd. has a market capitalization of RM211m, and paid its CEO total annual compensation worth RM941k over the year to June 2023. This means that the compensation hasn't changed much from last year. In particular, the salary of RM655.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the Malaysian Construction industry with market capitalizations below RM935m, reported a median total CEO compensation of RM653k. Hence, we can conclude that Eric Kuan is remunerated higher than the industry median.
Component | 2023 | 2022 | Proportion (2023) |
Salary | RM655k | RM623k | 70% |
Other | RM286k | RM301k | 30% |
Total Compensation | RM941k | RM924k | 100% |
On an industry level, roughly 86% of total compensation represents salary and 14% is other remuneration. Fajarbaru Builder Group Bhd sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Fajarbaru Builder Group Bhd.'s Growth Numbers
Over the last three years, Fajarbaru Builder Group Bhd. has shrunk its earnings per share by 94% per year. In the last year, its revenue is up 29%.
The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Fajarbaru Builder Group Bhd. Been A Good Investment?
Fajarbaru Builder Group Bhd. has not done too badly by shareholders, with a total return of 8.6%, over three years. It would be nice to see that metric improve in the future. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.
To Conclude...
The overall company performance has been commendable, however there are still areas for improvement. EPS growth is still weak, and until that picks up, shareholders may find it hard to approve a pay rise for the CEO, since they are already paid above the average in their industry.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in Fajarbaru Builder Group Bhd we think you should know about.
Switching gears from Fajarbaru Builder Group Bhd, 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.
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