Key Things To Understand About Alliance Bank Malaysia Berhad's (KLSE:ABMB) CEO Pay Cheque

This article will reflect on the compensation paid to Joel Kornreich who has served as CEO of Alliance Bank Malaysia Berhad (KLSE:ABMB) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Alliance Bank Malaysia Berhad.

See our latest analysis for Alliance Bank Malaysia Berhad

Comparing Alliance Bank Malaysia Berhad's CEO Compensation With the industry

Our data indicates that Alliance Bank Malaysia Berhad has a market capitalization of RM4.4b, and total annual CEO compensation was reported as RM6.3m for the year to March 2020. We note that's a decrease of 15% compared to last year. In particular, the salary of RM4.17m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between RM1.6b and RM6.5b had a median total CEO compensation of RM1.1m. This suggests that Joel Kornreich is paid more than the median for the industry.

On an industry level, around 60% of total compensation represents salary and 40% is other remuneration. It's interesting to note that Alliance Bank Malaysia Berhad pays out a greater portion of remuneration through salary, compared to the 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.

Alliance Bank Malaysia Berhad's Growth

Over the last three years, Alliance Bank Malaysia Berhad has shrunk its earnings per share by 4.9% per year. In the last year, its revenue is down 1.7%.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Alliance Bank Malaysia Berhad Been A Good Investment?

Given the total shareholder loss of 26% over three years, many shareholders in Alliance Bank Malaysia Berhad are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, Alliance Bank Malaysia Berhad is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Alliance Bank Malaysia Berhad (free visualization of insider trades).

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.

When trading Alliance Bank Malaysia Berhad or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.