We Think Some Shareholders May Hesitate To Increase Niche Capital Emas Holdings Berhad's (KLSE:NICE) CEO Compensation

Key Insights

• Niche Capital Emas Holdings Berhad's Annual General Meeting to take place on 29th of November
• CEO Julian Foo's total compensation includes salary of RM720.0k
• The total compensation is 35% higher than the average for the industry
• Niche Capital Emas Holdings Berhad's EPS declined by 34% over the past three years while total shareholder loss over the past three years was 38%

The underwhelming share price performance of Niche Capital Emas Holdings Berhad (KLSE:NICE) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. The AGM coming up on 29th of November will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

View our latest analysis for Niche Capital Emas Holdings Berhad

Comparing Niche Capital Emas Holdings Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that Niche Capital Emas Holdings Berhad has a market capitalization of RM167m, and reported total annual CEO compensation of RM875k for the year to June 2023. That's a notable increase of 62% on last year. In particular, the salary of RM720.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Malaysia Luxury industry with market capitalizations below RM936m, we found that the median total CEO compensation was RM647k. This suggests that Julian Foo is paid more than the median for the industry. Furthermore, Julian Foo directly owns RM31m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	RM720k	RM450k	82%
Other	RM155k	RM89k	18%
Total Compensation	RM875k	RM539k	100%

On an industry level, around 73% of total compensation represents salary and 27% is other remuneration. Niche Capital Emas Holdings Berhad is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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 Niche Capital Emas Holdings Berhad's Growth Numbers

Over the last three years, Niche Capital Emas Holdings Berhad has shrunk its earnings per share by 34% per year. In the last year, its revenue is up 71%.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Niche Capital Emas Holdings Berhad Been A Good Investment?

The return of -38% over three years would not have pleased Niche Capital Emas Holdings Berhad shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which is a bit concerning) in Niche Capital Emas Holdings Berhad we think you should know about.

Important note: Niche Capital Emas Holdings 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.