It Looks Like The CEO Of Nextgreen Global Berhad (KLSE:NGGB) May Be Underpaid Compared To Peers

Key Insights

• Nextgreen Global Berhad's Annual General Meeting to take place on 25th of June
• Salary of RM300.0k is part of CEO Thiam Lim's total remuneration
• The overall pay is 38% below the industry average
• Nextgreen Global Berhad's EPS grew by 25% over the past three years while total shareholder return over the past three years was 37%

The impressive results at Nextgreen Global Berhad (KLSE:NGGB) recently will be great news for shareholders. At the upcoming AGM on 25th of June, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

Check out our latest analysis for Nextgreen Global Berhad

Comparing Nextgreen Global Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that Nextgreen Global Berhad has a market capitalization of RM878m, and reported total annual CEO compensation of RM349k for the year to December 2023. There was no change in the compensation compared to last year. Notably, the salary which is RM300.0k, represents most of the total compensation being paid.

For comparison, other companies in the Malaysia Commercial Services industry with market capitalizations ranging between RM471m and RM1.9b had a median total CEO compensation of RM559k. This suggests that Thiam Lim is paid below the industry median. What's more, Thiam Lim holds RM96m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	RM300k	RM300k	86%
Other	RM49k	RM49k	14%
Total Compensation	RM349k	RM349k	100%

On an industry level, around 80% of total compensation represents salary and 20% is other remuneration. Nextgreen Global Berhad is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Nextgreen Global Berhad's Growth

Nextgreen Global Berhad has seen its earnings per share (EPS) increase by 25% a year over the past three years. Its revenue is up 17% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Nextgreen Global Berhad Been A Good Investment?

Most shareholders would probably be pleased with Nextgreen Global Berhad for providing a total return of 37% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Nextgreen Global Berhad that you should be aware of before investing.

Important note: Nextgreen Global Berhad is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com