Fintec Global Berhad's (KLSE:FINTEC) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Fintec Global Berhad's Annual General Meeting to take place on 29th of November
• Salary of RM359.0k is part of CEO Steve Tan's total remuneration
• Total compensation is 94% above industry average
• Fintec Global Berhad's three-year loss to shareholders was 63% while its EPS grew by 165% over the past three years

The underwhelming share price performance of Fintec Global Berhad (KLSE:FINTEC) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 29th of November. 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 Fintec Global Berhad

Comparing Fintec Global Berhad's CEO Compensation With The Industry

Our data indicates that Fintec Global Berhad has a market capitalization of RM34m, and total annual CEO compensation was reported as RM406k for the year to June 2024. This means that the compensation hasn't changed much from last year. In particular, the salary of RM359.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Malaysia Capital Markets industry with market capitalizations below RM894m, reported a median total CEO compensation of RM209k. This suggests that Steve Tan is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	RM359k	RM359k	88%
Other	RM47k	RM48k	12%
Total Compensation	RM406k	RM407k	100%

On an industry level, roughly 92% of total compensation represents salary and 8% is other remuneration. Fintec Global Berhad is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Fintec Global Berhad's Growth

Over the past three years, Fintec Global Berhad has seen its earnings per share (EPS) grow by 165% per year. Its revenue is up 17% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Fintec Global Berhad Been A Good Investment?

The return of -63% over three years would not have pleased Fintec Global Berhad shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Fintec Global Berhad you should be aware of, and 3 of them don't sit too well with us.

Important note: Fintec Global 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.