Shareholders May Be A Little Conservative With Dutch Lady Milk Industries Berhad's (KLSE:DLADY) CEO Compensation For Now

Key Insights

• Dutch Lady Milk Industries Berhad's Annual General Meeting to take place on 28th of May
• Salary of RM1.31m is part of CEO Ramjeet Virik's total remuneration
• The overall pay is comparable to the industry average
• Dutch Lady Milk Industries Berhad's EPS declined by 0.4% over the past three years while total shareholder return over the past three years was 2.3%

The anaemic share price growth at Dutch Lady Milk Industries Berhad (KLSE:DLADY) over the past few years has probably not impressed shareholders and may be due to earnings not growing over that period. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 28th of May. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

See our latest analysis for Dutch Lady Milk Industries Berhad

How Does Total Compensation For Ramjeet Virik Compare With Other Companies In The Industry?

At the time of writing, our data shows that Dutch Lady Milk Industries Berhad has a market capitalization of RM2.1b, and reported total annual CEO compensation of RM1.5m for the year to December 2023. That's a notable increase of 33% on last year. Notably, the salary which is RM1.31m, represents most of the total compensation being paid.

On examining similar-sized companies in the Malaysian Food industry with market capitalizations between RM939m and RM3.8b, we discovered that the median CEO total compensation of that group was RM1.7m. This suggests that Dutch Lady Milk Industries Berhad remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	RM1.3m	RM780k	86%
Other	RM212k	RM363k	14%
Total Compensation	RM1.5m	RM1.1m	100%

Speaking on an industry level, nearly 66% of total compensation represents salary, while the remainder of 34% is other remuneration. Dutch Lady Milk Industries Berhad pays out 86% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Dutch Lady Milk Industries Berhad's Growth Numbers

Over the last three years, Dutch Lady Milk Industries Berhad has not seen its earnings per share change much, though they have deteriorated slightly. In the last year, its revenue is up 7.7%.

Its a bit disappointing to see that the company has failed to grow its EPS. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. 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 Dutch Lady Milk Industries Berhad Been A Good Investment?

Dutch Lady Milk Industries Berhad has not done too badly by shareholders, with a total return of 2.3%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

The lacklustre share price returns along with the lack of earnings growth makes us think that a strong rebound in the share price may be difficult. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Dutch Lady Milk Industries Berhad that investors should think about before committing capital to this stock.

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.