Increases to CEO Compensation Might Be Put On Hold For Now at Hibiscus Petroleum Berhad (KLSE:HIBISCS)

Key Insights

• Hibiscus Petroleum Berhad to hold its Annual General Meeting on 27th of November
• Salary of RM3.30m is part of CEO Kenneth Pereira's total remuneration
• The overall pay is 1,357% above the industry average
• Hibiscus Petroleum Berhad's EPS grew by 6.6% over the past three years while total shareholder return over the past three years was 4.2%

CEO Kenneth Pereira has done a decent job of delivering relatively good performance at Hibiscus Petroleum Berhad ( KLSE:HIBISCS ) recently. As shareholders go into the upcoming AGM on 27th of November, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Hibiscus Petroleum Berhad

Comparing Hibiscus Petroleum Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that Hibiscus Petroleum Berhad has a market capitalization of RM1.5b, and reported total annual CEO compensation of RM9.3m for the year to June 2024. That's a notable increase of 11% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at RM3.3m.

In comparison with other companies in the Malaysia Oil and Gas industry with market capitalizations ranging from RM894m to RM3.6b, the reported median CEO total compensation was RM639k. This suggests that Kenneth Pereira is paid more than the median for the industry. Moreover, Kenneth Pereira also holds RM57m worth of Hibiscus Petroleum Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	RM3.3m	RM3.3m	35%
Other	RM6.0m	RM5.1m	65%
Total Compensation	RM9.3m	RM8.4m	100%

On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. In Hibiscus Petroleum Berhad's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Hibiscus Petroleum Berhad's Growth

Hibiscus Petroleum Berhad's earnings per share (EPS) grew 6.6% per year over the last three years. Its revenue is down 1.6% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings. .

Has Hibiscus Petroleum Berhad Been A Good Investment?

Hibiscus Petroleum Berhad has not done too badly by shareholders, with a total return of 4.2%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Hibiscus Petroleum Berhad that investors should think about before committing capital to this stock.

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.