Shareholders May Not Be So Generous With PPB Group Berhad's (KLSE:PPB) CEO Compensation And Here's Why

Key Insights

• PPB Group Berhad will host its Annual General Meeting on 17th of May
• Salary of RM1.32m is part of CEO Soon Lim's total remuneration
• The total compensation is similar to the average for the industry
• PPB Group Berhad's three-year loss to shareholders was 13% while its EPS grew by 1.9% over the past three years

As many shareholders of PPB Group Berhad (KLSE:PPB) will be aware, they have not made a gain on their investment in the past three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 17th of May. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for PPB Group Berhad

How Does Total Compensation For Soon Lim Compare With Other Companies In The Industry?

According to our data, PPB Group Berhad has a market capitalization of RM22b, and paid its CEO total annual compensation worth RM4.2m over the year to December 2023. That's a fairly small increase of 3.4% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at RM1.3m.

On examining similar-sized companies in the Malaysian Food industry with market capitalizations between RM9.5b and RM30b, we discovered that the median CEO total compensation of that group was RM4.2m. This suggests that PPB Group Berhad remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	RM1.3m	RM1.2m	31%
Other	RM2.9m	RM2.9m	69%
Total Compensation	RM4.2m	RM4.1m	100%

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. In PPB Group Berhad's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

PPB Group Berhad's Growth

PPB Group Berhad's earnings per share (EPS) grew 1.9% per year over the last three years. It saw its revenue drop 7.0% over the last year.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. 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 PPB Group Berhad Been A Good Investment?

With a three year total loss of 13% for the shareholders, PPB Group Berhad would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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.

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 PPB Group Berhad that you should be aware of before investing.

Switching gears from PPB Group 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.