It Looks Like OKA Corporation Bhd's (KLSE:OKA) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• OKA Corporation Bhd will host its Annual General Meeting on 27th of August
• Salary of RM480.0k is part of CEO Choo Ong's total remuneration
• Total compensation is 297% above industry average
• OKA Corporation Bhd's EPS declined by 16% over the past three years while total shareholder loss over the past three years was 4.0%

The results at OKA Corporation Bhd (KLSE:OKA) have been quite disappointing recently and CEO Choo Ong 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 27th of August. 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. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for OKA Corporation Bhd

Comparing OKA Corporation Bhd's CEO Compensation With The Industry

According to our data, OKA Corporation Bhd has a market capitalization of RM164m, and paid its CEO total annual compensation worth RM764k over the year to March 2024. There was no change in the compensation compared to last year. Notably, the salary which is RM480.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Malaysia Basic Materials industry with market capitalizations below RM875m, we found that the median total CEO compensation was RM193k. Hence, we can conclude that Choo Ong is remunerated higher than the industry median. Moreover, Choo Ong also holds RM2.9m worth of OKA Corporation Bhd 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	RM480k	RM449k	63%
Other	RM284k	RM315k	37%
Total Compensation	RM764k	RM764k	100%

On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. OKA Corporation Bhd sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at OKA Corporation Bhd's Growth Numbers

Over the last three years, OKA Corporation Bhd has shrunk its earnings per share by 16% per year. In the last year, its revenue is up 3.9%.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 OKA Corporation Bhd Been A Good Investment?

Given the total shareholder loss of 4.0% over three years, many shareholders in OKA Corporation Bhd are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for OKA Corporation Bhd (1 is concerning!) that you should be aware of before investing here.

Switching gears from OKA Corporation Bhd, 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.