It's Unlikely That Subur Tiasa Holdings Berhad's (KLSE:SUBUR) CEO Will See A Huge Pay Rise This Year

Key Insights

• Subur Tiasa Holdings Berhad's Annual General Meeting to take place on 28th of May
• Salary of RM2.40m is part of CEO Ing Tiong's total remuneration
• The total compensation is 461% higher than the average for the industry
• Subur Tiasa Holdings Berhad's EPS declined by 4.4% over the past three years while total shareholder return over the past three years was 19%

The share price of Subur Tiasa Holdings Berhad (KLSE:SUBUR) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting 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. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for Subur Tiasa Holdings Berhad

Comparing Subur Tiasa Holdings Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that Subur Tiasa Holdings Berhad has a market capitalization of RM169m, and reported total annual CEO compensation of RM5.2m for the year to December 2023. We note that's a small decrease of 3.5% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at RM2.4m.

For comparison, other companies in the Malaysia Forestry industry with market capitalizations below RM939m, reported a median total CEO compensation of RM929k. Accordingly, our analysis reveals that Subur Tiasa Holdings Berhad pays Ing Tiong north of the industry median. What's more, Ing Tiong holds RM2.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. Subur Tiasa Holdings Berhad pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Subur Tiasa Holdings Berhad's Growth

Over the last three years, Subur Tiasa Holdings Berhad has shrunk its earnings per share by 4.4% per year. Its revenue is down 21% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last 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 Subur Tiasa Holdings Berhad Been A Good Investment?

With a total shareholder return of 19% over three years, Subur Tiasa Holdings Berhad shareholders would, in general, be reasonably content. 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...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Subur Tiasa Holdings Berhad that investors should think about before committing capital to this stock.

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.