This Is Why Berjaya Food Berhad's (KLSE:BJFOOD) CEO Compensation Looks Appropriate

Key Insights

• Berjaya Food Berhad's Annual General Meeting to take place on 11th of December
• CEO Sydney Quays' total compensation includes salary of RM169.2k
• The overall pay is 78% below the industry average
• Over the past three years, Berjaya Food Berhad's EPS fell by 70% and over the past three years, the total shareholder return was 5.1%

Performance at Berjaya Food Berhad (KLSE:BJFOOD) has been rather uninspiring recently and shareholders may be wondering how CEO Sydney Quays plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 11th of December. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for Berjaya Food Berhad

How Does Total Compensation For Sydney Quays Compare With Other Companies In The Industry?

According to our data, Berjaya Food Berhad has a market capitalization of RM682m, and paid its CEO total annual compensation worth RM235k over the year to June 2024. That's a fairly small increase of 5.4% over the previous year. Notably, the salary which is RM169.2k, represents most of the total compensation being paid.

For comparison, other companies in the Malaysian Hospitality industry with market capitalizations ranging between RM445m and RM1.8b had a median total CEO compensation of RM1.0m. Accordingly, Berjaya Food Berhad pays its CEO under the industry median. Furthermore, Sydney Quays directly owns RM1.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	RM169k	RM158k	72%
Other	RM66k	RM64k	28%
Total Compensation	RM235k	RM223k	100%

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Our data reveals that Berjaya Food Berhad allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Berjaya Food Berhad's Growth Numbers

Over the last three years, Berjaya Food Berhad has shrunk its earnings per share by 70% per year. In the last year, its revenue is down 46%.

The decline in EPS is a bit concerning. 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Berjaya Food Berhad Been A Good Investment?

With a total shareholder return of 5.1% over three years, Berjaya Food Berhad has done okay by shareholders, but there's always room for improvement. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

To Conclude...

Shareholder returns while positive, need to be looked at along with earnings, which have failed to grow and this could mean that the current momentum may not continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in Berjaya Food Berhad we think you should know about.

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.