Here's Why Shareholders May Want To Be Cautious With Increasing Kumpulan Fima Berhad's (KLSE:KFIMA) CEO Pay Packet

Key Insights

• Kumpulan Fima Berhad will host its Annual General Meeting on 29th of August
• CEO Roslan Bin Hamir's total compensation includes salary of RM863.6k
• The overall pay is 460% above the industry average
• Kumpulan Fima Berhad's total shareholder return over the past three years was 21% while its EPS grew by 14% over the past three years

CEO Roslan Bin Hamir has done a decent job of delivering relatively good performance at Kumpulan Fima Berhad (KLSE:KFIMA) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 29th of August. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for Kumpulan Fima Berhad

Comparing Kumpulan Fima Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that Kumpulan Fima Berhad has a market capitalization of RM548m, and reported total annual CEO compensation of RM1.8m for the year to March 2024. Notably, that's a decrease of 9.7% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at RM864k.

On comparing similar-sized companies in the Malaysia Industrials industry with market capitalizations below RM876m, we found that the median total CEO compensation was RM317k. Hence, we can conclude that Roslan Bin Hamir is remunerated higher than the industry median. Moreover, Roslan Bin Hamir also holds RM3.2m worth of Kumpulan Fima Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	RM864k	RM838k	49%
Other	RM914k	RM1.1m	51%
Total Compensation	RM1.8m	RM2.0m	100%

Talking in terms of the industry, salary represented approximately 53% of total compensation out of all the companies we analyzed, while other remuneration made up 47% of the pie. Although there is a difference in how total compensation is set, Kumpulan Fima Berhad more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Kumpulan Fima Berhad's Growth

Over the past three years, Kumpulan Fima Berhad has seen its earnings per share (EPS) grow by 14% per year. Its revenue is down 10.0% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Kumpulan Fima Berhad Been A Good Investment?

Kumpulan Fima Berhad has served shareholders reasonably well, with a total return of 21% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this 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.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Kumpulan Fima Berhad that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.