Sunzen Biotech Berhad's (KLSE:SUNZEN) CEO Looks Due For A Compensation Raise

Key Insights

• Sunzen Biotech Berhad will host its Annual General Meeting on 19th of December
• CEO Yek Teo's total compensation includes salary of RM270.0k
• The overall pay is 40% below the industry average
• Sunzen Biotech Berhad's EPS grew by 104% over the past three years while total shareholder return over the past three years was 52%

The solid performance at Sunzen Biotech Berhad (KLSE:SUNZEN) has been impressive and shareholders will probably be pleased to know that CEO Yek Teo has delivered. This would be kept in mind at the upcoming AGM on 19th of December which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

See our latest analysis for Sunzen Biotech Berhad

How Does Total Compensation For Yek Teo Compare With Other Companies In The Industry?

Our data indicates that Sunzen Biotech Berhad has a market capitalization of RM249m, and total annual CEO compensation was reported as RM321k for the year to June 2024. That's a notable increase of 50% on last year. We note that the salary portion, which stands at RM270.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Malaysia Personal Products industry with market capitalizations below RM888m, reported a median total CEO compensation of RM533k. This suggests that Yek Teo is paid below the industry median. Moreover, Yek Teo also holds RM38m worth of Sunzen Biotech Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2022	Proportion (2024)
Salary	RM270k	RM175k	84%
Other	RM51k	RM39k	16%
Total Compensation	RM321k	RM214k	100%

Talking in terms of the industry, salary represented approximately 83% of total compensation out of all the companies we analyzed, while other remuneration made up 17% of the pie. Although there is a difference in how total compensation is set, Sunzen Biotech Berhad more or less reflects the market in terms of setting the salary. 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.

Sunzen Biotech Berhad's Growth

Sunzen Biotech Berhad has seen its earnings per share (EPS) increase by 104% a year over the past three years. Its revenue is up 14% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Sunzen Biotech Berhad Been A Good Investment?

We think that the total shareholder return of 52%, over three years, would leave most Sunzen Biotech Berhad shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

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 did our research and spotted 2 warning signs for Sunzen Biotech Berhad that investors should look into moving forward.

Important note: Sunzen Biotech 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.