Shareholders May Be Wary Of Increasing Kobay Technology Bhd.'s (KLSE:KOBAY) CEO Compensation Package

Key Insights

• Kobay Technology Bhd will host its Annual General Meeting on 29th of November
• CEO Hean Eng Koay's total compensation includes salary of RM457.8k
• The overall pay is 311% above the industry average
• Kobay Technology Bhd's EPS declined by 20% over the past three years while total shareholder loss over the past three years was 78%

Shareholders will probably not be too impressed with the underwhelming results at Kobay Technology Bhd. (KLSE:KOBAY) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 29th of November. 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 Kobay Technology Bhd

Comparing Kobay Technology Bhd.'s CEO Compensation With The Industry

Our data indicates that Kobay Technology Bhd. has a market capitalization of RM403m, and total annual CEO compensation was reported as RM540k for the year to June 2024. That's mostly flat as compared to the prior year's compensation. In particular, the salary of RM457.8k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Malaysian Machinery industry with market capitalizations below RM894m, reported a median total CEO compensation of RM131k. Accordingly, our analysis reveals that Kobay Technology Bhd. pays Hean Eng Koay north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	RM458k	RM458k	85%
Other	RM82k	RM79k	15%
Total Compensation	RM540k	RM537k	100%

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. Kobay Technology Bhd pays out 85% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Kobay Technology Bhd.'s Growth Numbers

Kobay Technology Bhd. has reduced its earnings per share by 20% a year over the last three years. Its revenue is up 5.4% over the last year.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Kobay Technology Bhd. Been A Good Investment?

Few Kobay Technology Bhd. shareholders would feel satisfied with the return of -78% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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 Kobay Technology Bhd that investors should think about before committing capital to this stock.

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.