Increases to ECM Libra Group Berhad's (KLSE:ECM) CEO Compensation Might Cool off for now

Key Insights

• ECM Libra Group Berhad's Annual General Meeting to take place on 6th of June
• CEO Gareth Lim's total compensation includes salary of RM456.0k
• The overall pay is 120% above the industry average
• ECM Libra Group Berhad's three-year loss to shareholders was 4.5% while its EPS grew by 124% over the past three years

In the past three years, the share price of ECM Libra Group Berhad (KLSE:ECM) has struggled to generate growth for its shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 6th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for ECM Libra Group Berhad

Comparing ECM Libra Group Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that ECM Libra Group Berhad has a market capitalization of RM104m, and reported total annual CEO compensation of RM812k for the year to December 2023. Notably, that's an increase of 19% over the year before. In particular, the salary of RM456.0k, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Malaysian Hospitality industry with market capitalizations below RM941m, we found that the median total CEO compensation was RM369k. Accordingly, our analysis reveals that ECM Libra Group Berhad pays Gareth Lim north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	RM456k	RM360k	56%
Other	RM356k	RM323k	44%
Total Compensation	RM812k	RM683k	100%

Talking in terms of the industry, salary represented approximately 72% of total compensation out of all the companies we analyzed, while other remuneration made up 28% of the pie. It's interesting to note that ECM Libra Group Berhad allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at ECM Libra Group Berhad's Growth Numbers

Over the past three years, ECM Libra Group Berhad has seen its earnings per share (EPS) grow by 124% per year. In the last year, its revenue is up 38%.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 ECM Libra Group Berhad Been A Good Investment?

Given the total shareholder loss of 4.5% over three years, many shareholders in ECM Libra Group Berhad are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At 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 will likely improve performance in the future.

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 3 warning signs for ECM Libra Group Berhad that you should be aware of before investing.

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.