Southern Steel Berhad's (KLSE:SSTEEL) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Southern Steel Berhad to hold its Annual General Meeting on 11th of November
• Salary of RM1.02m is part of CEO CK Yeoh Yeoh's total remuneration
• Total compensation is 90% above industry average
• Southern Steel Berhad's EPS declined by 91% over the past three years while total shareholder loss over the past three years was 38%

Shareholders will probably not be too impressed with the underwhelming results at Southern Steel Berhad (KLSE:SSTEEL) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 11th of November. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Southern Steel Berhad

Comparing Southern Steel Berhad's CEO Compensation With The Industry

According to our data, Southern Steel Berhad has a market capitalization of RM298m, and paid its CEO total annual compensation worth RM1.6m over the year to June 2024. That is, the compensation was roughly the same as last year. In particular, the salary of RM1.02m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Malaysian Metals and Mining industry with market capitalizations below RM874m, we found that the median total CEO compensation was RM853k. Accordingly, our analysis reveals that Southern Steel Berhad pays CK Yeoh Yeoh north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	RM1.0m	RM990k	63%
Other	RM600k	RM669k	37%
Total Compensation	RM1.6m	RM1.7m	100%

Speaking on an industry level, nearly 73% of total compensation represents salary, while the remainder of 27% is other remuneration. In Southern Steel Berhad's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Southern Steel Berhad's Growth Numbers

Over the last three years, Southern Steel Berhad has shrunk its earnings per share by 91% per year. In the last year, its revenue is down 5.8%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Southern Steel Berhad Been A Good Investment?

With a total shareholder return of -38% over three years, Southern Steel Berhad shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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 it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Southern Steel Berhad that investors should look into moving forward.

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.