Increases to CEO Compensation Might Be Put On Hold For Now at RHB Bank Berhad (KLSE:RHBBANK)
Key Insights
- RHB Bank Berhad to hold its Annual General Meeting on 8th of May
- CEO Mohd Rashid Mohamad's total compensation includes salary of RM4.66m
- Total compensation is 848% above industry average
- Over the past three years, RHB Bank Berhad's EPS grew by 3.4% and over the past three years, the total shareholder return was 41%
Performance at RHB Bank Berhad (KLSE:RHBBANK) has been reasonably good and CEO Mohd Rashid Mohamad has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 8th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.
See our latest analysis for RHB Bank Berhad
How Does Total Compensation For Mohd Rashid Mohamad Compare With Other Companies In The Industry?
According to our data, RHB Bank Berhad has a market capitalization of RM29b, and paid its CEO total annual compensation worth RM7.7m over the year to December 2024. Notably, that's an increase of 27% over the year before. We note that the salary portion, which stands at RM4.66m constitutes the majority of total compensation received by the CEO.
On examining similar-sized companies in the Malaysian Banks industry with market capitalizations between RM17b and RM52b, we discovered that the median CEO total compensation of that group was RM812k. Hence, we can conclude that Mohd Rashid Mohamad is remunerated higher than the industry median.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | RM4.7m | RM3.9m | 61% |
| Other | RM3.0m | RM2.1m | 39% |
| Total Compensation | RM7.7m | RM6.1m | 100% |
Speaking on an industry level, nearly 54% of total compensation represents salary, while the remainder of 46% is other remuneration. RHB Bank Berhad pays out 61% of remuneration in the form of a salary, significantly higher than the industry average. 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.
A Look at RHB Bank Berhad's Growth Numbers
RHB Bank Berhad's earnings per share (EPS) grew 3.4% per year over the last three years. Its revenue is up 8.0% over the last year.
We're not particularly impressed by the revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. 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 RHB Bank Berhad Been A Good Investment?
Boasting a total shareholder return of 41% over three years, RHB Bank Berhad has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
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, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for RHB Bank Berhad that investors should look into moving forward.
Switching gears from RHB Bank 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.