Shareholders May Not Be So Generous With Mieco Chipboard Berhad's (KLSE:MIECO) CEO Compensation And Here's Why

Key Insights

• Mieco Chipboard Berhad will host its Annual General Meeting on 28th of May
• Salary of RM2.76m is part of CEO Ah Chai Ng's total remuneration
• The total compensation is 197% higher than the average for the industry
• Mieco Chipboard Berhad's EPS declined by 97% over the past three years while total shareholder return over the past three years was 28%

Despite positive share price growth of 28% for Mieco Chipboard Berhad (KLSE:MIECO) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 28th of May may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Mieco Chipboard Berhad

Comparing Mieco Chipboard Berhad's CEO Compensation With The Industry

According to our data, Mieco Chipboard Berhad has a market capitalization of RM680m, and paid its CEO total annual compensation worth RM2.8m over the year to December 2023. We note that's a small decrease of 7.7% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth RM2.8m.

For comparison, other companies in the Malaysia Forestry industry with market capitalizations below RM939m, reported a median total CEO compensation of RM930k. This suggests that Ah Chai Ng is paid more than the median for the industry. What's more, Ah Chai Ng holds RM428m 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	RM2.8m	RM2.8m	100%
Other	-	RM230k	-
Total Compensation	RM2.8m	RM3.0m	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. At the company level, Mieco Chipboard Berhad pays Ah Chai Ng solely through a salary, preferring to go down a conventional route. 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.

A Look at Mieco Chipboard Berhad's Growth Numbers

Over the last three years, Mieco Chipboard Berhad has shrunk its earnings per share by 97% per year. It achieved revenue growth of 9.3% over the last year.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Mieco Chipboard Berhad Been A Good Investment?

Mieco Chipboard Berhad has served shareholders reasonably well, with a total return of 28% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Mieco Chipboard Berhad pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

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 1 warning sign for Mieco Chipboard Berhad that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.