Here's Why Shareholders Should Examine Sin Heng Chan (Malaya) Berhad's (KLSE:SHCHAN) CEO Compensation Package More Closely

Key Insights

• Sin Heng Chan (Malaya) Berhad to hold its Annual General Meeting on 29th of May
• Total pay for CEO Keng Choo includes RM987.5k salary
• The total compensation is 492% higher than the average for the industry
• Over the past three years, Sin Heng Chan (Malaya) Berhad's EPS fell by 8.7% and over the past three years, the total loss to shareholders 48%

Sin Heng Chan (Malaya) Berhad (KLSE:SHCHAN) has not performed well recently and CEO Keng Choo 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 29th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Sin Heng Chan (Malaya) Berhad

How Does Total Compensation For Keng Choo Compare With Other Companies In The Industry?

At the time of writing, our data shows that Sin Heng Chan (Malaya) Berhad has a market capitalization of RM103m, and reported total annual CEO compensation of RM1.2m for the year to December 2023. That's a slight decrease of 5.9% on the prior year. In particular, the salary of RM987.5k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Malaysian Food industry with market capitalizations below RM939m, reported a median total CEO compensation of RM206k. This suggests that Keng Choo is paid more than the median for the industry. Furthermore, Keng Choo directly owns RM9.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	RM988k	RM942k	81%
Other	RM234k	RM356k	19%
Total Compensation	RM1.2m	RM1.3m	100%

On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. Sin Heng Chan (Malaya) Berhad pays out 81% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Sin Heng Chan (Malaya) Berhad's Growth

Over the last three years, Sin Heng Chan (Malaya) Berhad has shrunk its earnings per share by 8.7% per year. In the last year, its revenue is down 20%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Sin Heng Chan (Malaya) Berhad Been A Good Investment?

Few Sin Heng Chan (Malaya) Berhad shareholders would feel satisfied with the return of -48% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in 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. In our study, we found 3 warning signs for Sin Heng Chan (Malaya) Berhad you should be aware of, and 1 of them shouldn't be ignored.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.