We Think Shareholders May Want To Consider A Review Of Prestar Resources Berhad's (KLSE:PRESTAR) CEO Compensation Package

Key Insights

• Prestar Resources Berhad to hold its Annual General Meeting on 12th of June
• Total pay for CEO Yew Peng Toh includes RM916.0k salary
• The overall pay is 43% above the industry average
• Prestar Resources Berhad's three-year loss to shareholders was 19% while its EPS was down 14% over the past three years

Prestar Resources Berhad (KLSE:PRESTAR) has not performed well recently and CEO Yew Peng Toh will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 12th of June. 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.

Check out our latest analysis for Prestar Resources Berhad

Comparing Prestar Resources Berhad's CEO Compensation With The Industry

According to our data, Prestar Resources Berhad has a market capitalization of RM178m, and paid its CEO total annual compensation worth RM1.3m over the year to December 2023. We note that's an increase of 8.5% above last year. Notably, the salary which is RM916.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Malaysian Metals and Mining industry with market capitalizations below RM940m, we found that the median total CEO compensation was RM934k. Accordingly, our analysis reveals that Prestar Resources Berhad pays Yew Peng Toh north of the industry median. Moreover, Yew Peng Toh also holds RM8.6m worth of Prestar Resources Berhad stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	RM916k	RM889k	68%
Other	RM424k	RM346k	32%
Total Compensation	RM1.3m	RM1.2m	100%

Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. Prestar Resources Berhad is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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 Prestar Resources Berhad's Growth Numbers

Over the last three years, Prestar Resources Berhad has shrunk its earnings per share by 14% per year. In the last year, its revenue is down 11%.

Few shareholders would be pleased to read that EPS have declined. 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. 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 Prestar Resources Berhad Been A Good Investment?

With a three year total loss of 19% for the shareholders, Prestar Resources Berhad would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid 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.

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 Prestar Resources Berhad that you should be aware of before investing.

Important note: Prestar Resources 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.

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.