Here's Why Shareholders Should Examine Nestlé (Malaysia) Berhad's (KLSE:NESTLE) CEO Compensation Package More Closely

Key Insights

• Nestlé (Malaysia) Berhad's Annual General Meeting to take place on 30th of April
• Total pay for CEO Juan Jose Campillo includes RM1.74m salary
• The overall pay is 38% above the industry average
• Nestlé (Malaysia) Berhad's EPS declined by 10.0% over the past three years while total shareholder loss over the past three years was 36%

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Nestlé (Malaysia) Berhad (KLSE:NESTLE) has not performed well recently and CEO Juan Jose Campillo will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 30th of April. 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.

Check out our latest analysis for Nestlé (Malaysia) Berhad

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

At the time of writing, our data shows that Nestlé (Malaysia) Berhad has a market capitalization of RM19b, and reported total annual CEO compensation of RM6.2m for the year to December 2024. Notably, that's an increase of 24% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at RM1.7m.

For comparison, other companies in the Malaysian Food industry with market capitalizations ranging between RM8.8b and RM28b had a median total CEO compensation of RM4.5m. Accordingly, our analysis reveals that Nestlé (Malaysia) Berhad pays Juan Jose Campillo north of the industry median.

Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. In Nestlé (Malaysia) Berhad's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Nestlé (Malaysia) Berhad's Growth Numbers

Over the last three years, Nestlé (Malaysia) Berhad has shrunk its earnings per share by 10.0% per year. Its revenue is down 12% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Nestlé (Malaysia) Berhad Been A Good Investment?

With a total shareholder return of -36% over three years, Nestlé (Malaysia) Berhad shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 Nestlé (Malaysia) Berhad that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.