Here's Why Shareholders Should Examine NTPM Holdings Berhad's (KLSE:NTPM) CEO Compensation Package More Closely

Key Insights

• NTPM Holdings Berhad's Annual General Meeting to take place on 25th of September
• Total pay for CEO Chong Lee includes RM974.4k salary
• The overall pay is 223% above the industry average
• NTPM Holdings Berhad's EPS declined by 41% over the past three years while total shareholder loss over the past three years was 19%

The results at NTPM Holdings Berhad (KLSE:NTPM) have been quite disappointing recently and CEO Chong Lee bears some responsibility for this. At the upcoming AGM on 25th of September, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for NTPM Holdings Berhad

How Does Total Compensation For Chong Lee Compare With Other Companies In The Industry?

At the time of writing, our data shows that NTPM Holdings Berhad has a market capitalization of RM472m, and reported total annual CEO compensation of RM1.4m for the year to April 2023. That's a notable decrease of 27% on last year. Notably, the salary which is RM974.4k, represents most of the total compensation being paid.

In comparison with other companies in the Malaysia Household Products industry with market capitalizations under RM938m, the reported median total CEO compensation was RM419k. Accordingly, our analysis reveals that NTPM Holdings Berhad pays Chong Lee north of the industry median. What's more, Chong Lee holds RM55m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	RM974k	RM840k	72%
Other	RM379k	RM1.0m	28%
Total Compensation	RM1.4m	RM1.9m	100%

Speaking on an industry level, nearly 75% of total compensation represents salary, while the remainder of 25% is other remuneration. Our data reveals that NTPM Holdings Berhad allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at NTPM Holdings Berhad's Growth Numbers

NTPM Holdings Berhad has reduced its earnings per share by 41% a year over the last three years. It achieved revenue growth of 14% over the last year.

Few shareholders would be pleased to read that EPS have declined. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. 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 NTPM Holdings Berhad Been A Good Investment?

With a three year total loss of 19% for the shareholders, NTPM Holdings Berhad would certainly have some dissatisfied shareholders. 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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for NTPM Holdings Berhad that investors should be aware of in a dynamic business environment.

Important note: NTPM Holdings Berhad is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.