Increases to CEO Compensation Might Be Put On Hold For Now at Frontken Corporation Berhad (KLSE:FRONTKN)

Key Insights

• Frontken Corporation Berhad's Annual General Meeting to take place on 14th of June
• Total pay for CEO Nicholas Ng includes RM72.8k salary
• The overall pay is 665% above the industry average
• Frontken Corporation Berhad's total shareholder return over the past three years was 58% while its EPS grew by 10% over the past three years

CEO Nicholas Ng has done a decent job of delivering relatively good performance at Frontken Corporation Berhad (KLSE:FRONTKN) recently. As shareholders go into the upcoming AGM on 14th of June, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Frontken Corporation Berhad

How Does Total Compensation For Nicholas Ng Compare With Other Companies In The Industry?

At the time of writing, our data shows that Frontken Corporation Berhad has a market capitalization of RM6.9b, and reported total annual CEO compensation of RM7.0m for the year to December 2023. That's a notable decrease of 13% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at RM73k.

For comparison, other companies in the Malaysia Commercial Services industry with market capitalizations ranging between RM4.7b and RM15b had a median total CEO compensation of RM919k. Accordingly, our analysis reveals that Frontken Corporation Berhad pays Nicholas Ng north of the industry median. Furthermore, Nicholas Ng directly owns RM53m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	RM73k	RM73k	1%
Other	RM7.0m	RM8.0m	99%
Total Compensation	RM7.0m	RM8.0m	100%

On an industry level, roughly 80% of total compensation represents salary and 20% is other remuneration. Frontken Corporation Berhad has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Frontken Corporation Berhad's Growth

Over the past three years, Frontken Corporation Berhad has seen its earnings per share (EPS) grow by 10% per year. In the last year, its revenue is up 2.9%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Frontken Corporation Berhad Been A Good Investment?

We think that the total shareholder return of 58%, over three years, would leave most Frontken Corporation Berhad shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Frontken Corporation Berhad prefers rewarding its CEO through non-salary benefits. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed 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.

Shareholders may want to check for free if Frontken Corporation Berhad insiders are buying or selling shares.

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.