Increases to United Plantations Berhad's (KLSE:UTDPLT) CEO Compensation Might Cool off for now

Under the guidance of CEO Carl Bek-Nielsen, United Plantations Berhad (KLSE:UTDPLT) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 22 April 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for United Plantations Berhad

Comparing United Plantations Berhad's CEO Compensation With the industry

Our data indicates that United Plantations Berhad has a market capitalization of RM6.0b, and total annual CEO compensation was reported as RM2.2m for the year to December 2020. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at RM252k.

For comparison, other companies in the same industry with market capitalizations ranging between RM4.1b and RM13b had a median total CEO compensation of RM1.5m. Accordingly, our analysis reveals that United Plantations Berhad pays Carl Bek-Nielsen north of the industry median. Moreover, Carl Bek-Nielsen also holds RM75m worth of United Plantations Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	RM252k	RM246k	12%
Other	RM1.9m	RM1.9m	88%
Total Compensation	RM2.2m	RM2.2m	100%

On an industry level, roughly 76% of total compensation represents salary and 24% is other remuneration. In United Plantations Berhad's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at United Plantations Berhad's Growth Numbers

United Plantations Berhad saw earnings per share stay pretty flat over the last three years. It achieved revenue growth of 14% over the last year.

We would argue that the modest growth in revenue is a notable positive. And, while modest, the EPS growth is noticeable. So while performance isn't amazing, we think it really does seem quite respectable. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has United Plantations Berhad Been A Good Investment?

United Plantations Berhad has served shareholders reasonably well, with a total return of 19% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for United Plantations Berhad that investors should be aware of in a dynamic business environment.

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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