We Discuss Why Lion Industries Corporation Berhad's (KLSE:LIONIND) CEO Compensation May Be Closely Reviewed

Key Insights

• Lion Industries Corporation Berhad to hold its Annual General Meeting on 30th of May
• Total pay for CEO William Cheng includes RM960.0k salary
• Total compensation is similar to the industry average
• Over the past three years, Lion Industries Corporation Berhad's EPS fell by 47% and over the past three years, the total loss to shareholders 63%

Our free stock report includes 4 warning signs investors should be aware of before investing in Lion Industries Corporation Berhad. Read for free now.

The results at Lion Industries Corporation Berhad (KLSE:LIONIND) have been quite disappointing recently and CEO William Cheng bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 30th of May. 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.

See our latest analysis for Lion Industries Corporation Berhad

How Does Total Compensation For William Cheng Compare With Other Companies In The Industry?

At the time of writing, our data shows that Lion Industries Corporation Berhad has a market capitalization of RM133m, and reported total annual CEO compensation of RM1.0m for the year to December 2024. This was the same as last year. In particular, the salary of RM960.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Malaysian Metals and Mining industry with market capitalizations below RM847m, reported a median total CEO compensation of RM831k. This suggests that Lion Industries Corporation Berhad remunerates its CEO largely in line with the industry average. Moreover, William Cheng also holds RM43m worth of Lion Industries Corporation Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	RM960k	RM960k	96%
Other	RM40k	RM40k	4%
Total Compensation	RM1.0m	RM1.0m	100%

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. Lion Industries Corporation Berhad pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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.

Lion Industries Corporation Berhad's Growth

Lion Industries Corporation Berhad has reduced its earnings per share by 47% a year over the last three years. Its revenue is down 13% 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Lion Industries Corporation Berhad Been A Good Investment?

Few Lion Industries Corporation Berhad shareholders would feel satisfied with the return of -63% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Lion Industries Corporation Berhad pays its CEO a majority of compensation through a salary. 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 an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 4 warning signs (and 2 which shouldn't be ignored) in Lion Industries Corporation Berhad we think you should know about.

Switching gears from Lion Industries Corporation 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.