We Think Some Shareholders May Hesitate To Increase P.I.E. Industrial Berhad's (KLSE:PIE) CEO Compensation

Key Insights

• P.I.E. Industrial Berhad will host its Annual General Meeting on 16th of May
• Total pay for CEO Chung Mui includes RM382.0k salary
• Total compensation is 426% above industry average
• Over the past three years, P.I.E. Industrial Berhad's EPS fell by 4.1% and over the past three years, the total shareholder return was 74%

We've discovered 1 warning sign about P.I.E. Industrial Berhad. View them for free.

Despite strong share price growth of 74% for P.I.E. Industrial Berhad (KLSE:PIE) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 16th of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

See our latest analysis for P.I.E. Industrial Berhad

How Does Total Compensation For Chung Mui Compare With Other Companies In The Industry?

At the time of writing, our data shows that P.I.E. Industrial Berhad has a market capitalization of RM1.7b, and reported total annual CEO compensation of RM2.6m for the year to December 2024. Notably, that's an increase of 31% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at RM382k.

On examining similar-sized companies in the Malaysian Electrical industry with market capitalizations between RM860m and RM3.4b, we discovered that the median CEO total compensation of that group was RM500k. Hence, we can conclude that Chung Mui is remunerated higher than the industry median. Moreover, Chung Mui also holds RM11m worth of P.I.E. Industrial 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	RM382k	RM363k	15%
Other	RM2.2m	RM1.6m	85%
Total Compensation	RM2.6m	RM2.0m	100%

Talking in terms of the industry, salary represented approximately 62% of total compensation out of all the companies we analyzed, while other remuneration made up 38% of the pie. P.I.E. Industrial Berhad sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

P.I.E. Industrial Berhad's Growth

Over the last three years, P.I.E. Industrial Berhad has shrunk its earnings per share by 4.1% per year. In the last year, its revenue is down 20%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has P.I.E. Industrial Berhad Been A Good Investment?

Boasting a total shareholder return of 74% over three years, P.I.E. Industrial Berhad has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for P.I.E. Industrial Berhad that investors should look into moving forward.

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.