We Think Some Shareholders May Hesitate To Increase Astino Berhad's (KLSE:ASTINO) CEO Compensation

Key Insights

• Astino Berhad to hold its Annual General Meeting on 12 January 2023
• CEO Hung Ng's total compensation includes salary of RM1.17m
• Total compensation is 265% above industry average
• Astino Berhad's EPS grew by 16% over the past three years while total shareholder return over the past three years was 34%

Performance at Astino Berhad (KLSE:ASTINO) has been reasonably good and CEO Hung Ng has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 12 January 2023. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Astino Berhad

Comparing Astino Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that Astino Berhad has a market capitalization of RM234m, and reported total annual CEO compensation of RM2.8m for the year to July 2022. We note that's an increase of 72% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at RM1.2m.

In comparison with other companies in the Malaysia Building industry with market capitalizations under RM879m, the reported median total CEO compensation was RM767k. This suggests that Hung Ng is paid more than the median for the industry. Furthermore, Hung Ng directly owns RM15m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	RM1.2m	RM972k	42%
Other	RM1.6m	RM654k	58%
Total Compensation	RM2.8m	RM1.6m	100%

Speaking on an industry level, nearly 71% of total compensation represents salary, while the remainder of 29% is other remuneration. In Astino Berhad's case, non-salary compensation represents a greater slice of total remuneration, 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 Astino Berhad's Growth Numbers

Astino Berhad's earnings per share (EPS) grew 16% per year over the last three years. In the last year, its revenue is up 16%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Astino Berhad Been A Good Investment?

We think that the total shareholder return of 34%, over three years, would leave most Astino Berhad shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus 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.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Astino Berhad that you should be aware of before investing.

Important note: Astino Berhad is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.