We Think Shareholders May Want To Consider A Review Of Zhulian Corporation Berhad's (KLSE:ZHULIAN) CEO Compensation Package

Key Insights

• Zhulian Corporation Berhad will host its Annual General Meeting on 21st of May
• CEO Meng-Keat Teoh's total compensation includes salary of RM1.42m
• The overall pay is 115% above the industry average
• Over the past three years, Zhulian Corporation Berhad's EPS fell by 25% and over the past three years, the total loss to shareholders 28%

Our free stock report includes 2 warning signs investors should be aware of before investing in Zhulian Corporation Berhad. Read for free now.

Zhulian Corporation Berhad (KLSE:ZHULIAN) has not performed well recently and CEO Meng-Keat Teoh will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 21st of May. 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.

See our latest analysis for Zhulian Corporation Berhad

Comparing Zhulian Corporation Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that Zhulian Corporation Berhad has a market capitalization of RM520m, and reported total annual CEO compensation of RM1.7m for the year to November 2024. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at RM1.42m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Malaysia Luxury industry with market capitalizations under RM858m, the reported median total CEO compensation was RM802k. Accordingly, our analysis reveals that Zhulian Corporation Berhad pays Meng-Keat Teoh north of the industry median. What's more, Meng-Keat Teoh holds RM33m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	RM1.4m	RM1.4m	82%
Other	RM306k	RM327k	18%
Total Compensation	RM1.7m	RM1.7m	100%

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. According to our research, Zhulian Corporation Berhad has allocated a higher percentage of pay to salary in comparison to the wider 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.

Zhulian Corporation Berhad's Growth

Zhulian Corporation Berhad has reduced its earnings per share by 25% a year over the last three years. Its revenue is down 1.6% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Zhulian Corporation Berhad Been A Good Investment?

Since shareholders would have lost about 28% over three years, some Zhulian Corporation Berhad investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

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, 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 an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in Zhulian Corporation Berhad we think you should know about.

Switching gears from Zhulian Corporation 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.