Shareholders May Be More Conservative With GHL Systems Berhad's (KLSE:GHLSYS) CEO Compensation For Now

Key Insights

• GHL Systems Berhad to hold its Annual General Meeting on 28th of May
• Total pay for CEO Sean Hesh includes RM1.74m salary
• Total compensation is 129% above industry average
• Over the past three years, GHL Systems Berhad's EPS grew by 9.0% and over the past three years, the total loss to shareholders 46%

Shareholders of GHL Systems Berhad (KLSE:GHLSYS) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 28th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for GHL Systems Berhad

How Does Total Compensation For Sean Hesh Compare With Other Companies In The Industry?

At the time of writing, our data shows that GHL Systems Berhad has a market capitalization of RM1.0b, and reported total annual CEO compensation of RM2.8m for the year to December 2023. That's a notable increase of 34% on last year. We note that the salary portion, which stands at RM1.74m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the Malaysia Diversified Financial industry with market capitalizations between RM469m and RM1.9b, we discovered that the median CEO total compensation of that group was RM1.2m. Hence, we can conclude that Sean Hesh is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	RM1.7m	RM1.7m	62%
Other	RM1.0m	RM427k	38%
Total Compensation	RM2.8m	RM2.1m	100%

On an industry level, roughly 95% of total compensation represents salary and 5% is other remuneration. GHL Systems Berhad pays a modest slice of remuneration through salary, as compared to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

GHL Systems Berhad's Growth

GHL Systems Berhad's earnings per share (EPS) grew 9.0% per year over the last three years. It achieved revenue growth of 12% over the last year.

We think the revenue growth is good. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. 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 GHL Systems Berhad Been A Good Investment?

The return of -46% over three years would not have pleased GHL Systems Berhad shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for GHL Systems Berhad that investors should think about before committing capital to this stock.

Switching gears from GHL Systems Berhad, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.