Kim Hin Industry Berhad's (KLSE:KIMHIN) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Kim Hin Industry Berhad to hold its Annual General Meeting on 30th of May
• Total pay for CEO John Chua includes RM1.02m salary
• Total compensation is 267% above industry average
• Over the past three years, Kim Hin Industry Berhad's EPS fell by 32% and over the past three years, the total loss to shareholders 40%

Kim Hin Industry Berhad (KLSE:KIMHIN) has not performed well recently and CEO John Chua will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 30th 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.

View our latest analysis for Kim Hin Industry Berhad

How Does Total Compensation For John Chua Compare With Other Companies In The Industry?

At the time of writing, our data shows that Kim Hin Industry Berhad has a market capitalization of RM73m, and reported total annual CEO compensation of RM1.3m for the year to December 2023. Notably, that's a decrease of 11% over the year before. Notably, the salary which is RM1.02m, represents most of the total compensation being paid.

In comparison with other companies in the Malaysia Building industry with market capitalizations under RM942m, the reported median total CEO compensation was RM349k. Accordingly, our analysis reveals that Kim Hin Industry Berhad pays John Chua north of the industry median. Moreover, John Chua also holds RM273k worth of Kim Hin Industry Berhad stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	RM1.0m	RM1.2m	80%
Other	RM263k	RM288k	20%
Total Compensation	RM1.3m	RM1.4m	100%

On an industry level, roughly 80% of total compensation represents salary and 20% is other remuneration. Although there is a difference in how total compensation is set, Kim Hin Industry 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.

A Look at Kim Hin Industry Berhad's Growth Numbers

Over the last three years, Kim Hin Industry Berhad has shrunk its earnings per share by 32% per year. Its revenue is down 8.8% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last 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 Kim Hin Industry Berhad Been A Good Investment?

The return of -40% over three years would not have pleased Kim Hin Industry Berhad shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Kim Hin Industry Berhad that investors should be aware of in a dynamic business environment.

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.