Tan Chong Motor Holdings Berhad's (KLSE:TCHONG) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Tan Chong Motor Holdings Berhad to hold its Annual General Meeting on 30th of May
• Total pay for CEO Daniel Ho includes RM1.23m salary
• The overall pay is 249% above the industry average
• Tan Chong Motor Holdings Berhad's three-year loss to shareholders was 57% while its EPS was down 78% over the past three years

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Shareholders will probably not be too impressed with the underwhelming results at Tan Chong Motor Holdings Berhad (KLSE:TCHONG) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 30th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Tan Chong Motor Holdings Berhad

How Does Total Compensation For Daniel Ho Compare With Other Companies In The Industry?

According to our data, Tan Chong Motor Holdings Berhad has a market capitalization of RM300m, and paid its CEO total annual compensation worth RM1.4m over the year to December 2024. That's slightly lower by 3.6% over the previous year. Notably, the salary which is RM1.23m, represents most of the total compensation being paid.

On comparing similar-sized companies in the Malaysia Auto industry with market capitalizations below RM847m, we found that the median total CEO compensation was RM409k. Accordingly, our analysis reveals that Tan Chong Motor Holdings Berhad pays Daniel Ho north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	RM1.2m	RM1.2m	86%
Other	RM203k	RM304k	14%
Total Compensation	RM1.4m	RM1.5m	100%

Speaking on an industry level, nearly 57% of total compensation represents salary, while the remainder of 43% is other remuneration. According to our research, Tan Chong Motor Holdings Berhad has allocated a higher percentage of pay to salary in comparison to the wider industry. 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.

Tan Chong Motor Holdings Berhad's Growth

Tan Chong Motor Holdings Berhad has reduced its earnings per share by 78% a year over the last three years. In the last year, its revenue is down 18%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Tan Chong Motor Holdings Berhad Been A Good Investment?

The return of -57% over three years would not have pleased Tan Chong Motor Holdings Berhad shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Tan Chong Motor Holdings Berhad (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Tan Chong Motor Holdings 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.

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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.