We Think Shareholders May Want To Consider A Review Of Malayan Banking Berhad's (KLSE:MAYBANK) CEO Compensation Package

Malayan Banking Berhad (KLSE:MAYBANK) has not performed well recently and CEO Abdul Bin Alias will probably need to up their game. At the upcoming AGM on 06 May 2021, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Malayan Banking Berhad

Comparing Malayan Banking Berhad's CEO Compensation With the industry

Our data indicates that Malayan Banking Berhad has a market capitalization of RM94b, and total annual CEO compensation was reported as RM7.9m for the year to December 2020. That's a fairly small increase of 4.7% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at RM2.8m.

For comparison, other companies in the industry with market capitalizations above RM33b, reported a median total CEO compensation of RM1.7m. Accordingly, our analysis reveals that Malayan Banking Berhad pays Abdul Bin Alias north of the industry median. Moreover, Abdul Bin Alias also holds RM5.4m worth of Malayan Banking Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	RM2.8m	RM2.8m	35%
Other	RM5.2m	RM4.8m	65%
Total Compensation	RM7.9m	RM7.6m	100%

Speaking on an industry level, nearly 58% of total compensation represents salary, while the remainder of 42% is other remuneration. Malayan Banking Berhad pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Malayan Banking Berhad's Growth

Malayan Banking Berhad has reduced its earnings per share by 7.2% a year over the last three years. It saw its revenue drop 12% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Malayan Banking Berhad Been A Good Investment?

With a three year total loss of 6.6% for the shareholders, Malayan Banking Berhad would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid 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.

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 2 warning signs for Malayan Banking Berhad (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Malayan Banking 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. 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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