Should Shareholders Reconsider Cepatwawasan Group Berhad's (KLSE:CEPAT) CEO Compensation Package?

Key Insights

• Cepatwawasan Group Berhad to hold its Annual General Meeting on 20th of May
• Salary of RM315.0k is part of CEO King-Seng Mah's total remuneration
• The overall pay is 55% above the industry average
• Cepatwawasan Group Berhad's three-year loss to shareholders was 24% while its EPS was down 25% over the past three years

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Cepatwawasan Group Berhad (KLSE:CEPAT) has not performed well recently and CEO King-Seng Mah will probably need to up their game. At the upcoming AGM on 20th of May, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Cepatwawasan Group Berhad

Comparing Cepatwawasan Group Berhad's CEO Compensation With The Industry

Our data indicates that Cepatwawasan Group Berhad has a market capitalization of RM201m, and total annual CEO compensation was reported as RM526k for the year to December 2024. This means that the compensation hasn't changed much from last year. In particular, the salary of RM315.0k, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Malaysian Food industry with market capitalizations below RM865m, we found that the median total CEO compensation was RM340k. Accordingly, our analysis reveals that Cepatwawasan Group Berhad pays King-Seng Mah north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	RM315k	RM314k	60%
Other	RM211k	RM203k	40%
Total Compensation	RM526k	RM517k	100%

On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. There isn't a significant difference between Cepatwawasan Group Berhad and the broader market, in terms of salary allocation in the overall compensation package. 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.

A Look at Cepatwawasan Group Berhad's Growth Numbers

Over the last three years, Cepatwawasan Group Berhad has shrunk its earnings per share by 25% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

The decline in EPS is a bit concerning. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Cepatwawasan Group Berhad Been A Good Investment?

Given the total shareholder loss of 24% over three years, many shareholders in Cepatwawasan Group Berhad are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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 Cepatwawasan Group Berhad that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.