Here's Why It's Unlikely That Asia File Corporation Bhd.'s (KLSE:ASIAFLE) CEO Will See A Pay Rise This Year

Key Insights

• Asia File Corporation Bhd to hold its Annual General Meeting on 27th of September
• Total pay for CEO Soon Lim includes RM1.91m salary
• The total compensation is 245% higher than the average for the industry
• Asia File Corporation Bhd's EPS declined by 9.4% over the past three years while total shareholder loss over the past three years was 17%

Shareholders will probably not be too impressed with the underwhelming results at Asia File Corporation Bhd. (KLSE:ASIAFLE) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 27th of September. 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.

Check out our latest analysis for Asia File Corporation Bhd

How Does Total Compensation For Soon Lim Compare With Other Companies In The Industry?

According to our data, Asia File Corporation Bhd. has a market capitalization of RM369m, and paid its CEO total annual compensation worth RM3.4m over the year to March 2024. Notably, that's an increase of 22% over the year before. We note that the salary of RM1.91m makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the Malaysian Commercial Services industry with market capitalizations under RM836m, the reported median total CEO compensation was RM994k. Accordingly, our analysis reveals that Asia File Corporation Bhd. pays Soon Lim north of the industry median. Moreover, Soon Lim also holds RM186m worth of Asia File Corporation Bhd 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	RM1.9m	RM1.5m	56%
Other	RM1.5m	RM1.4m	44%
Total Compensation	RM3.4m	RM2.8m	100%

Talking in terms of the industry, salary represented approximately 71% of total compensation out of all the companies we analyzed, while other remuneration made up 29% of the pie. Asia File Corporation Bhd sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Asia File Corporation Bhd.'s Growth Numbers

Asia File Corporation Bhd. has reduced its earnings per share by 9.4% a year over the last three years. In the last year, its revenue is down 3.2%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Asia File Corporation Bhd. Been A Good Investment?

Since shareholders would have lost about 17% over three years, some Asia File Corporation Bhd. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Asia File Corporation Bhd that you should be aware of before investing.

Switching gears from Asia File Corporation Bhd, 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.