Favelle Favco Berhad's (KLSE:FAVCO) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Favelle Favco Berhad's Annual General Meeting to take place on 12th of June
• Salary of RM614.0k is part of CEO Chung Mac's total remuneration
• The overall pay is 553% above the industry average
• Favelle Favco Berhad's EPS grew by 3.8% over the past three years while total shareholder return over the past three years was 44%

Under the guidance of CEO Chung Mac, Favelle Favco Berhad (KLSE:FAVCO) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 12th of June. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Favelle Favco Berhad

Comparing Favelle Favco Berhad's CEO Compensation With The Industry

Our data indicates that Favelle Favco Berhad has a market capitalization of RM492m, and total annual CEO compensation was reported as RM819k for the year to December 2023. That's a notable decrease of 26% on last year. We note that the salary portion, which stands at RM614.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Malaysian Machinery industry with market capitalizations below RM940m, reported a median total CEO compensation of RM125k. Hence, we can conclude that Chung Mac is remunerated higher than the industry median. Moreover, Chung Mac also holds RM8.1m worth of Favelle Favco Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	RM614k	RM597k	75%
Other	RM205k	RM504k	25%
Total Compensation	RM819k	RM1.1m	100%

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. Although there is a difference in how total compensation is set, Favelle Favco Berhad more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Favelle Favco Berhad's Growth

Favelle Favco Berhad has seen its earnings per share (EPS) increase by 3.8% a year over the past three years. It achieved revenue growth of 30% over the last year.

It's great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Favelle Favco Berhad Been A Good Investment?

We think that the total shareholder return of 44%, over three years, would leave most Favelle Favco 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...

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. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for Favelle Favco Berhad you should be aware of, and 1 of them is significant.

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.