Shareholders Will Probably Hold Off On Increasing Southern Acids (M) Berhad's (KLSE:SAB) CEO Compensation For The Time Being

Key Insights

• Southern Acids (M) Berhad's Annual General Meeting to take place on 29th of August
• Salary of RM518.4k is part of CEO Nick Low's total remuneration
• Total compensation is 1,460% above industry average
• Over the past three years, Southern Acids (M) Berhad's EPS fell by 27% and over the past three years, the total loss to shareholders 2.6%

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In the past three years, the share price of Southern Acids (M) Berhad (KLSE:SAB) has struggled to generate growth for its shareholders. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. The AGM coming up on 29th of August will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

Check out our latest analysis for Southern Acids (M) Berhad

Comparing Southern Acids (M) Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that Southern Acids (M) Berhad has a market capitalization of RM470m, and reported total annual CEO compensation of RM963k for the year to March 2025. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is RM518.4k, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the Malaysian Chemicals industry with market capitalizations below RM847m, reported a median total CEO compensation of RM62k. Hence, we can conclude that Nick Low is remunerated higher than the industry median. Furthermore, Nick Low directly owns RM323k worth of shares in the company.

Talking in terms of the industry, salary represented approximately 54% of total compensation out of all the companies we analyzed, while other remuneration made up 46% of the pie. Although there is a difference in how total compensation is set, Southern Acids (M) Berhad more or less reflects the market in terms of setting the salary. 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.

Southern Acids (M) Berhad's Growth

Southern Acids (M) Berhad has reduced its earnings per share by 27% a year over the last three years. It achieved revenue growth of 20% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Southern Acids (M) Berhad Been A Good Investment?

Given the total shareholder loss of 2.6% over three years, many shareholders in Southern Acids (M) Berhad are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with 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 1 warning sign for Southern Acids (M) Berhad that you should be aware of before investing.

Important note: Southern Acids (M) 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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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.