Here's Why Shareholders May Want To Be Cautious With Increasing Malayan Flour Mills Berhad's (KLSE:MFLOUR) CEO Pay Packet

Key Insights

• Malayan Flour Mills Berhad's Annual General Meeting to take place on 19th of May
• CEO Wee Teh's total compensation includes salary of RM2.90m
• The overall pay is 1,582% above the industry average
• Malayan Flour Mills Berhad's EPS grew by 9.5% over the past three years while total shareholder loss over the past three years was 6.7%

We've discovered 3 warning signs about Malayan Flour Mills Berhad. View them for free.

In the past three years, shareholders of Malayan Flour Mills Berhad (KLSE:MFLOUR) have seen a loss on their investment. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 19th of May could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Malayan Flour Mills Berhad

Comparing Malayan Flour Mills Berhad's CEO Compensation With The Industry

Our data indicates that Malayan Flour Mills Berhad has a market capitalization of RM613m, and total annual CEO compensation was reported as RM5.7m for the year to December 2024. We note that's a small decrease of 5.9% on last year. Notably, the salary which is RM2.90m, represents a considerable chunk of the total compensation being paid.

On comparing similar-sized companies in the Malaysian Food industry with market capitalizations below RM860m, we found that the median total CEO compensation was RM338k. This suggests that Wee Teh is paid more than the median for the industry. Furthermore, Wee Teh directly owns RM99m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	RM2.9m	RM2.7m	51%
Other	RM2.8m	RM3.3m	49%
Total Compensation	RM5.7m	RM6.1m	100%

Speaking on an industry level, nearly 64% of total compensation represents salary, while the remainder of 36% is other remuneration. In Malayan Flour Mills Berhad's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Malayan Flour Mills Berhad's Growth Numbers

Malayan Flour Mills Berhad's earnings per share (EPS) grew 9.5% per year over the last three years. Revenue was pretty flat on last year.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Malayan Flour Mills Berhad Been A Good Investment?

Given the total shareholder loss of 6.7% over three years, many shareholders in Malayan Flour Mills Berhad are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Malayan Flour Mills Berhad (1 is significant!) that you should be aware of before investing here.

Switching gears from Malayan Flour Mills 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.