We Think Some Shareholders May Hesitate To Increase Muhibbah Engineering (M) Bhd.'s (KLSE:MUHIBAH) CEO Compensation

Key Insights

• Muhibbah Engineering (M) Bhd's Annual General Meeting to take place on 26th of June
• Salary of RM966.0k is part of CEO Ngan Mac's total remuneration
• The total compensation is 68% higher than the average for the industry
• Muhibbah Engineering (M) Bhd's total shareholder return over the past three years was 15% while its EPS grew by 124% over the past three years

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CEO Ngan Mac has done a decent job of delivering relatively good performance at Muhibbah Engineering (M) Bhd. (KLSE:MUHIBAH) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 26th of June. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Muhibbah Engineering (M) Bhd

How Does Total Compensation For Ngan Mac Compare With Other Companies In The Industry?

At the time of writing, our data shows that Muhibbah Engineering (M) Bhd. has a market capitalization of RM419m, and reported total annual CEO compensation of RM1.2m for the year to December 2024. That's a notable increase of 16% on last year. We note that the salary portion, which stands at RM966.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Malaysian Construction industry with market capitalizations below RM852m, reported a median total CEO compensation of RM740k. Hence, we can conclude that Ngan Mac is remunerated higher than the industry median. Moreover, Ngan Mac also holds RM84m worth of Muhibbah Engineering (M) Bhd stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 81% of total compensation represents salary and 19% is other remuneration. Our data reveals that Muhibbah Engineering (M) Bhd allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Muhibbah Engineering (M) Bhd.'s Growth

Over the past three years, Muhibbah Engineering (M) Bhd. has seen its earnings per share (EPS) grow by 124% per year. In the last year, its revenue is up 40%.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Muhibbah Engineering (M) Bhd. Been A Good Investment?

Muhibbah Engineering (M) Bhd. has served shareholders reasonably well, with a total return of 15% 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...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus 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.

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 3 warning signs for Muhibbah Engineering (M) Bhd (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the 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.