We Think Shareholders Will Probably Be Generous With LFE Corporation Berhad's (KLSE:LFECORP) CEO Compensation

Key Insights

• LFE Corporation Berhad's Annual General Meeting to take place on 26th of June
• Salary of RM450.1k is part of CEO Kenneth Liew's total remuneration
• The total compensation is similar to the average for the industry
• LFE Corporation Berhad's EPS grew by 84% over the past three years while total shareholder return over the past three years was 97%

It would be hard to discount the role that CEO Kenneth Liew has played in delivering the impressive results at LFE Corporation Berhad (KLSE:LFECORP) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 26th of June. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for LFE Corporation Berhad

Comparing LFE Corporation Berhad's CEO Compensation With The Industry

According to our data, LFE Corporation Berhad has a market capitalization of RM360m, and paid its CEO total annual compensation worth RM505k over the year to December 2023. That's just a smallish increase of 5.0% on last year. We note that the salary portion, which stands at RM450.1k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Malaysian Construction industry with market capitalizations below RM941m, reported a median total CEO compensation of RM709k. From this we gather that Kenneth Liew is paid around the median for CEOs in the industry. Furthermore, Kenneth Liew directly owns RM17m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	RM450k	RM421k	89%
Other	RM55k	RM60k	11%
Total Compensation	RM505k	RM481k	100%

On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. LFE Corporation Berhad pays out 89% 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.

LFE Corporation Berhad's Growth

Over the past three years, LFE Corporation Berhad has seen its earnings per share (EPS) grow by 84% per year. It achieved revenue growth of 105% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has LFE Corporation Berhad Been A Good Investment?

Most shareholders would probably be pleased with LFE Corporation Berhad for providing a total return of 97% over three years. 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...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for LFE Corporation Berhad (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from LFE Corporation Berhad, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com