Increases to SCC Holdings Berhad's (KLSE:SCC) CEO Compensation Might Cool off for now

Key Insights

• SCC Holdings Berhad to hold its Annual General Meeting on 28th of May
• Total pay for CEO Adam Cher includes RM405.0k salary
• The total compensation is 696% higher than the average for the industry
• Over the past three years, SCC Holdings Berhad's EPS grew by 1.3% and over the past three years, the total loss to shareholders 20%

In the past three years, the share price of SCC Holdings Berhad (KLSE:SCC) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 28th of May. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for SCC Holdings Berhad

How Does Total Compensation For Adam Cher Compare With Other Companies In The Industry?

According to our data, SCC Holdings Berhad has a market capitalization of RM42m, and paid its CEO total annual compensation worth RM505k over the year to December 2023. That's just a smallish increase of 4.7% on last year. In particular, the salary of RM405.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Malaysian Trade Distributors industry with market capitalizations under RM939m, the reported median total CEO compensation was RM63k. This suggests that Adam Cher is paid more than the median for the industry. Furthermore, Adam Cher directly owns RM302k worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	RM405k	RM360k	80%
Other	RM100k	RM122k	20%
Total Compensation	RM505k	RM482k	100%

On an industry level, around 80% of total compensation represents salary and 20% is other remuneration. SCC Holdings Berhad is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

A Look at SCC Holdings Berhad's Growth Numbers

Over the past three years, SCC Holdings Berhad has seen its earnings per share (EPS) grow by 1.3% per year. In the last year, its revenue is down 13%.

We generally like to see a little revenue growth, but the modest EPS growth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has SCC Holdings Berhad Been A Good Investment?

Given the total shareholder loss of 20% over three years, many shareholders in SCC Holdings Berhad are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for SCC Holdings Berhad (2 don't sit too well with us!) that you should be aware of before investing here.

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.