Shareholders May Find It Hard To Justify Increasing Landmarks Berhad's (KLSE:LANDMRK) CEO Compensation For Now

Key Insights

• Landmarks Berhad will host its Annual General Meeting on 29th of May
• CEO Mark Wee's total compensation includes salary of RM352.0k
• The total compensation is similar to the average for the industry
• Landmarks Berhad's EPS declined by 85% over the past three years while total shareholder loss over the past three years was 38%

In the past three years, the share price of Landmarks Berhad (KLSE:LANDMRK) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 29th of May, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

Check out our latest analysis for Landmarks Berhad

Comparing Landmarks Berhad's CEO Compensation With The Industry

Our data indicates that Landmarks Berhad has a market capitalization of RM154m, and total annual CEO compensation was reported as RM369k for the year to December 2023. That's a slight decrease of 5.8% on the prior year. We note that the salary portion, which stands at RM352.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Malaysian Hospitality industry with market capitalizations below RM939m, we found that the median total CEO compensation was RM369k. So it looks like Landmarks Berhad compensates Mark Wee in line with the median for the industry. What's more, Mark Wee holds RM20m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	RM352k	RM352k	95%
Other	RM17k	RM40k	5%
Total Compensation	RM369k	RM392k	100%

On an industry level, roughly 72% of total compensation represents salary and 28% is other remuneration. Landmarks Berhad is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. 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 Landmarks Berhad's Growth Numbers

Over the last three years, Landmarks Berhad has shrunk its earnings per share by 85% per year. It achieved revenue growth of 30% over the last year.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Landmarks Berhad Been A Good Investment?

With a total shareholder return of -38% over three years, Landmarks Berhad shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Mark receives almost all of their compensation through a salary. The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Landmarks Berhad that investors should be aware of in a dynamic business environment.

Important note: Landmarks 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.