We Think Bina Darulaman Berhad's (KLSE:BDB) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Bina Darulaman Berhad to hold its Annual General Meeting on 29th of May
• Salary of RM588.6k is part of CEO Raja Bin Raja Othman's total remuneration
• The total compensation is 32% higher than the average for the industry
• Bina Darulaman Berhad's three-year loss to shareholders was 24% while its EPS was down 22% over the past three years

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Bina Darulaman Berhad (KLSE:BDB) has not performed well recently and CEO Raja Bin Raja Othman will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 29th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Bina Darulaman Berhad

Comparing Bina Darulaman Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that Bina Darulaman Berhad has a market capitalization of RM76m, and reported total annual CEO compensation of RM972k for the year to December 2024. Notably, that's an increase of 37% over the year before. In particular, the salary of RM588.6k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Malaysian Construction industry with market capitalizations below RM855m, we found that the median total CEO compensation was RM739k. Hence, we can conclude that Raja Bin Raja Othman is remunerated higher than the industry median.

Component	2024	2023	Proportion (2024)
Salary	RM589k	RM540k	61%
Other	RM383k	RM170k	39%
Total Compensation	RM972k	RM710k	100%

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. Bina Darulaman Berhad sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Bina Darulaman Berhad's Growth

Bina Darulaman Berhad has reduced its earnings per share by 22% a year over the last three years. Its revenue is down 5.9% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Bina Darulaman Berhad Been A Good Investment?

With a three year total loss of 24% for the shareholders, Bina Darulaman Berhad would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Bina Darulaman Berhad that investors should think about before committing capital to this stock.

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.

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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.