Should Shareholders Reconsider Hibiscus Petroleum Berhad's (KLSE:HIBISCS) CEO Compensation Package?

Key Insights

• Hibiscus Petroleum Berhad will host its Annual General Meeting on 3rd of December
• Salary of RM4.20m is part of CEO Kenneth Pereira's total remuneration
• The overall pay is 827% above the industry average
• Over the past three years, Hibiscus Petroleum Berhad's EPS fell by 42% and over the past three years, the total loss to shareholders 40%

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Shareholders will probably not be too impressed with the underwhelming results at Hibiscus Petroleum Berhad (KLSE:HIBISCS) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 3rd of December. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

View 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 RM1.1b, and reported total annual CEO compensation of RM11m for the year to June 2025. Notably, that's an increase of 20% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at RM4.2m.

On examining similar-sized companies in the Malaysia Oil and Gas industry with market capitalizations between RM413m and RM1.7b, we discovered that the median CEO total compensation of that group was RM1.2m. Accordingly, our analysis reveals that Hibiscus Petroleum Berhad pays Kenneth Pereira north of the industry median. What's more, Kenneth Pereira holds RM44m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. Hibiscus Petroleum Berhad pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Hibiscus Petroleum Berhad's Growth Numbers

Hibiscus Petroleum Berhad has reduced its earnings per share by 42% a year over the last three years. In the last year, its revenue is down 14%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Hibiscus Petroleum Berhad Been A Good Investment?

The return of -40% over three years would not have pleased Hibiscus Petroleum Berhad shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Hibiscus Petroleum Berhad that investors should look into moving forward.

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.