We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Gamuda Berhad's (KLSE:GAMUDA) CEO For Now

Key Insights

• Gamuda Berhad will host its Annual General Meeting on 5th of December
• Salary of RM7.00m is part of CEO Yun Lin's total remuneration
• The total compensation is 121% higher than the average for the industry
• Over the past three years, Gamuda Berhad's EPS grew by 39% and over the past three years, the total shareholder return was 291%

Performance at Gamuda Berhad (KLSE:GAMUDA) has been reasonably good and CEO Yun Lin has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 5th of December, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for Gamuda Berhad

Comparing Gamuda Berhad's CEO Compensation With The Industry

According to our data, Gamuda Berhad has a market capitalization of RM25b, and paid its CEO total annual compensation worth RM7.8m over the year to July 2024. We note that's an increase of 38% above last year. We note that the salary portion, which stands at RM7.00m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the Malaysian Construction industry with market capitalizations between RM18b and RM53b, we discovered that the median CEO total compensation of that group was RM3.5m. Hence, we can conclude that Yun Lin is remunerated higher than the industry median. Furthermore, Yun Lin directly owns RM7.3b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	RM7.0m	RM4.2m	90%
Other	RM780k	RM1.4m	10%
Total Compensation	RM7.8m	RM5.7m	100%

Talking in terms of the industry, salary represented approximately 82% of total compensation out of all the companies we analyzed, while other remuneration made up 18% of the pie. Although there is a difference in how total compensation is set, Gamuda 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.

Gamuda Berhad's Growth

Gamuda Berhad's earnings per share (EPS) grew 39% per year over the last three years. In the last year, its revenue is up 62%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Gamuda Berhad Been A Good Investment?

We think that the total shareholder return of 291%, over three years, would leave most Gamuda Berhad shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its 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. 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Gamuda Berhad that you should be aware of before investing.

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.