We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Hong Leong Financial Group Berhad's (KLSE:HLFG) CEO For Now

Key Insights

• Hong Leong Financial Group Berhad will host its Annual General Meeting on 29th of October
• CEO Kong Khoon Tan's total compensation includes salary of RM3.48m
• The overall pay is 2,029% above the industry average
• Hong Leong Financial Group Berhad's EPS grew by 12% over the past three years while total shareholder return over the past three years was 14%

CEO Kong Khoon Tan has done a decent job of delivering relatively good performance at Hong Leong Financial Group Berhad (KLSE:HLFG) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 29th of October. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Hong Leong Financial Group Berhad

How Does Total Compensation For Kong Khoon Tan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Hong Leong Financial Group Berhad has a market capitalization of RM22b, and reported total annual CEO compensation of RM12m for the year to June 2024. That's a fairly small increase of 6.3% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at RM3.5m.

For comparison, other companies in the Malaysian Banks industry with market capitalizations ranging between RM17b and RM52b had a median total CEO compensation of RM569k. Accordingly, our analysis reveals that Hong Leong Financial Group Berhad pays Kong Khoon Tan north of the industry median. Moreover, Kong Khoon Tan also holds RM7.2m worth of Hong Leong Financial Group Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	RM3.5m	RM3.2m	29%
Other	RM8.6m	RM8.2m	71%
Total Compensation	RM12m	RM11m	100%

Talking in terms of the industry, salary represented approximately 44% of total compensation out of all the companies we analyzed, while other remuneration made up 56% of the pie. It's interesting to note that Hong Leong Financial Group Berhad allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Hong Leong Financial Group Berhad's Growth Numbers

Hong Leong Financial Group Berhad's earnings per share (EPS) grew 12% per year over the last three years. Its revenue is up 6.3% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Hong Leong Financial Group Berhad Been A Good Investment?

Hong Leong Financial Group Berhad has served shareholders reasonably well, with a total return of 14% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

Shareholders may want to check for free if Hong Leong Financial Group Berhad insiders are buying or selling shares.

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.

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.