We Think Some Shareholders May Hesitate To Increase Iconic Worldwide Berhad's (KLSE:ICONIC) CEO Compensation

The underwhelming share price performance of Iconic Worldwide Berhad (KLSE:ICONIC) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 29 September 2022 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Iconic Worldwide Berhad

How Does Total Compensation For Kean Tet Tan Compare With Other Companies In The Industry?

Our data indicates that Iconic Worldwide Berhad has a market capitalization of RM59m, and total annual CEO compensation was reported as RM289k for the year to March 2022. We note that's an increase of 23% above last year. In particular, the salary of RM225.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below RM912m, reported a median total CEO compensation of RM324k. This suggests that Iconic Worldwide Berhad remunerates its CEO largely in line with the industry average. Furthermore, Kean Tet Tan directly owns RM5.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	RM225k	RM178k	78%
Other	RM64k	RM57k	22%
Total Compensation	RM289k	RM235k	100%

Talking in terms of the industry, salary represented approximately 90% of total compensation out of all the companies we analyzed, while other remuneration made up 10% of the pie. In Iconic Worldwide Berhad's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Iconic Worldwide Berhad's Growth Numbers

Over the past three years, Iconic Worldwide Berhad has seen its earnings per share (EPS) grow by 75% per year. In the last year, its revenue is up 79%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Iconic Worldwide Berhad Been A Good Investment?

With a total shareholder return of -67% over three years, Iconic Worldwide Berhad shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. 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 be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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. In our study, we found 5 warning signs for Iconic Worldwide Berhad you should be aware of, and 1 of them is a bit unpleasant.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.