We Think Some Shareholders May Hesitate To Increase Keck Seng (Malaysia) Berhad's (KLSE:KSENG) CEO Compensation

Key Insights

• Keck Seng (Malaysia) Berhad will host its Annual General Meeting on 29th of May
• CEO Cheng Chong Ho's total compensation includes salary of RM2.88m
• The overall pay is 172% above the industry average
• Over the past three years, Keck Seng (Malaysia) Berhad's EPS grew by 82% and over the past three years, the total shareholder return was 95%

Performance at Keck Seng (Malaysia) Berhad (KLSE:KSENG) has been reasonably good and CEO Cheng Chong Ho has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 29th of May. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Keck Seng (Malaysia) Berhad

Comparing Keck Seng (Malaysia) Berhad's CEO Compensation With The Industry

According to our data, Keck Seng (Malaysia) Berhad has a market capitalization of RM2.3b, and paid its CEO total annual compensation worth RM4.8m over the year to December 2023. We note that's an increase of 21% above last year. In particular, the salary of RM2.88m, makes up a huge portion of the total compensation being paid to the CEO.

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. Accordingly, our analysis reveals that Keck Seng (Malaysia) Berhad pays Cheng Chong Ho north of the industry median. Furthermore, Cheng Chong Ho directly owns RM159m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	RM2.9m	RM2.7m	61%
Other	RM1.9m	RM1.2m	39%
Total Compensation	RM4.8m	RM3.9m	100%

On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. Our data reveals that Keck Seng (Malaysia) Berhad allocates salary more or less in line with the wider market. 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 Keck Seng (Malaysia) Berhad's Growth Numbers

Over the past three years, Keck Seng (Malaysia) Berhad has seen its earnings per share (EPS) grow by 82% per year. In the last year, its revenue is down 25%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Keck Seng (Malaysia) Berhad Been A Good Investment?

Most shareholders would probably be pleased with Keck Seng (Malaysia) Berhad for providing a total return of 95% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed 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.

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 1 warning sign for Keck Seng (Malaysia) Berhad that investors should look into moving forward.

Switching gears from Keck Seng (Malaysia) 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.