We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Batu Kawan Berhad's (KLSE:BKAWAN) CEO For Now

Key Insights

• Batu Kawan Berhad's Annual General Meeting to take place on 21st of February
• Total pay for CEO Hau-Hian Lee includes RM4.08m salary
• The total compensation is 735% higher than the average for the industry
• Batu Kawan Berhad's EPS grew by 5.8% over the past three years while total shareholder return over the past three years was 27%

Under the guidance of CEO Hau-Hian Lee, Batu Kawan Berhad (KLSE:BKAWAN) 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 21st of February. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Batu Kawan Berhad

Comparing Batu Kawan Berhad's CEO Compensation With The Industry

Our data indicates that Batu Kawan Berhad has a market capitalization of RM8.0b, and total annual CEO compensation was reported as RM9.5m for the year to September 2023. That's a slight decrease of 5.5% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at RM4.1m.

On examining similar-sized companies in the Malaysian Chemicals industry with market capitalizations between RM4.8b and RM15b, we discovered that the median CEO total compensation of that group was RM1.1m. This suggests that Hau-Hian Lee is paid more than the median for the industry. What's more, Hau-Hian Lee holds RM32m 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	RM4.1m	RM3.6m	43%
Other	RM5.4m	RM6.4m	57%
Total Compensation	RM9.5m	RM10m	100%

On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. Batu Kawan Berhad pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Batu Kawan Berhad's Growth Numbers

Batu Kawan Berhad has seen its earnings per share (EPS) increase by 5.8% a year over the past three years. It saw its revenue drop 13% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Batu Kawan Berhad Been A Good Investment?

Batu Kawan Berhad has served shareholders reasonably well, with a total return of 27% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Batu Kawan Berhad that investors should think about before committing capital to this stock.

Switching gears from Batu Kawan 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.