Here's Why It's Unlikely That Evergreen Fibreboard Berhad's (KLSE:EVERGRN) CEO Will See A Pay Rise This Year

Key Insights

• Evergreen Fibreboard Berhad will host its Annual General Meeting on 26th of May
• Salary of RM1.17m is part of CEO Jen Chang Kuo's total remuneration
• Total compensation is 123% above industry average
• Evergreen Fibreboard Berhad's EPS declined by 61% over the past three years while total shareholder loss over the past three years was 69%

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The results at Evergreen Fibreboard Berhad (KLSE:EVERGRN) have been quite disappointing recently and CEO Jen Chang Kuo bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 26th 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. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Evergreen Fibreboard Berhad

How Does Total Compensation For Jen Chang Kuo Compare With Other Companies In The Industry?

Our data indicates that Evergreen Fibreboard Berhad has a market capitalization of RM177m, and total annual CEO compensation was reported as RM1.9m for the year to December 2024. That's a notable increase of 37% on last year. In particular, the salary of RM1.17m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Malaysia Forestry industry with market capitalizations under RM858m, the reported median total CEO compensation was RM842k. This suggests that Jen Chang Kuo is paid more than the median for the industry. What's more, Jen Chang Kuo holds RM30m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 67% of total compensation represents salary and 33% is other remuneration. There isn't a significant difference between Evergreen Fibreboard Berhad and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Evergreen Fibreboard Berhad's Growth

Evergreen Fibreboard Berhad has reduced its earnings per share by 61% a year over the last three years. It achieved revenue growth of 8.7% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Evergreen Fibreboard Berhad Been A Good Investment?

The return of -69% over three years would not have pleased Evergreen Fibreboard Berhad shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.

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. That's why we did some digging and identified 1 warning sign for Evergreen Fibreboard Berhad that you should be aware of before investing.

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.

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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.