We Think Shareholders May Want To Consider A Review Of Malayan Flour Mills Berhad's (KLSE:MFLOUR) CEO Compensation Package

Key Insights

• Malayan Flour Mills Berhad will host its Annual General Meeting on 16th of May
• Salary of RM2.72m is part of CEO Wee Teh's total remuneration
• Total compensation is 666% above industry average
• Malayan Flour Mills Berhad's EPS declined by 14% over the past three years while total shareholder loss over the past three years was 14%

Shareholders will probably not be too impressed with the underwhelming results at Malayan Flour Mills Berhad (KLSE:MFLOUR) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 16th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Malayan Flour Mills Berhad

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

At the time of writing, our data shows that Malayan Flour Mills Berhad has a market capitalization of RM880m, and reported total annual CEO compensation of RM6.1m for the year to December 2023. We note that's an increase of 8.7% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at RM2.7m.

On examining similar-sized companies in the Malaysian Food industry with market capitalizations between RM474m and RM1.9b, we discovered that the median CEO total compensation of that group was RM790k. Accordingly, our analysis reveals that Malayan Flour Mills Berhad pays Wee Teh north of the industry median. Furthermore, Wee Teh directly owns RM141m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	RM2.7m	RM2.5m	45%
Other	RM3.3m	RM3.0m	55%
Total Compensation	RM6.1m	RM5.6m	100%

On an industry level, around 65% of total compensation represents salary and 35% is other remuneration. Malayan Flour Mills Berhad pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Malayan Flour Mills Berhad's Growth Numbers

Malayan Flour Mills Berhad has reduced its earnings per share by 14% a year over the last three years. Its revenue is up 8.0% over the last year.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Malayan Flour Mills Berhad Been A Good Investment?

Given the total shareholder loss of 14% 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.

In Summary...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Malayan Flour Mills 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.