UWC Berhad's (KLSE:UWC) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• UWC Berhad to hold its Annual General Meeting on 8th of January
• Salary of RM1.01m is part of CEO Chai Ng's total remuneration
• Total compensation is 242% above industry average
• Over the past three years, UWC Berhad's EPS fell by 24% and over the past three years, the total loss to shareholders 27%

The results at UWC Berhad (KLSE:UWC) have been quite disappointing recently and CEO Chai Ng bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 8th of January. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for UWC Berhad

Comparing UWC Berhad's CEO Compensation With The Industry

According to our data, UWC Berhad has a market capitalization of RM3.9b, and paid its CEO total annual compensation worth RM2.3m over the year to July 2023. We note that's an increase of 22% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at RM1.0m.

For comparison, other companies in the Malaysian Machinery industry with market capitalizations ranging between RM1.8b and RM7.4b had a median total CEO compensation of RM666k. This suggests that Chai Ng is paid more than the median for the industry. Moreover, Chai Ng also holds RM292m worth of UWC Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	RM1.0m	RM914k	44%
Other	RM1.3m	RM952k	56%
Total Compensation	RM2.3m	RM1.9m	100%

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. UWC Berhad sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

UWC Berhad's Growth

UWC Berhad has reduced its earnings per share by 24% a year over the last three years. It saw its revenue drop 38% over the last year.

Overall this is not a very positive result for shareholders. 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has UWC Berhad Been A Good Investment?

With a three year total loss of 27% for the shareholders, UWC Berhad would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for UWC Berhad that investors should be aware of in a dynamic business environment.

Switching gears from UWC 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.