HeveaBoard Berhad's (KLSE:HEVEA) CEO Might Not Expect Shareholders To Be So Generous This Year

Shareholders will probably not be too impressed with the underwhelming results at HeveaBoard Berhad (KLSE:HEVEA) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 30 June 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for HeveaBoard Berhad

Comparing HeveaBoard Berhad's CEO Compensation With the industry

Our data indicates that HeveaBoard Berhad has a market capitalization of RM291m, and total annual CEO compensation was reported as RM1.4m for the year to December 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at RM1.00m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under RM829m, the reported median total CEO compensation was RM723k. Hence, we can conclude that Hau Yoong is remunerated higher than the industry median. Furthermore, Hau Yoong directly owns RM9.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	RM1.0m	RM1.1m	73%
Other	RM379k	RM332k	27%
Total Compensation	RM1.4m	RM1.4m	100%

Speaking on an industry level, nearly 90% of total compensation represents salary, while the remainder of 10% is other remuneration. HeveaBoard Berhad pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

HeveaBoard Berhad's Growth

Over the last three years, HeveaBoard Berhad has shrunk its earnings per share by 33% per year. Its revenue is down 1.8% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. 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 HeveaBoard Berhad Been A Good Investment?

Since shareholders would have lost about 22% over three years, some HeveaBoard Berhad investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 HeveaBoard Berhad that you should be aware of before investing.

Important note: HeveaBoard 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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