Shareholders Will Probably Hold Off On Increasing Sasbadi Holdings Berhad's (KLSE:SASBADI) CEO Compensation For The Time Being

Shareholders of Sasbadi Holdings Berhad (KLSE:SASBADI) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 16 February 2023 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Sasbadi Holdings Berhad

Comparing Sasbadi Holdings Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that Sasbadi Holdings Berhad has a market capitalization of RM55m, and reported total annual CEO compensation of RM422k for the year to August 2022. We note that's an increase of 90% above last year. In particular, the salary of RM333.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Malaysia Media industry with market capitalizations below RM862m, reported a median total CEO compensation of RM452k. From this we gather that King Hui Law is paid around the median for CEOs in the industry. Furthermore, King Hui Law directly owns RM11m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	RM333k	RM141k	79%
Other	RM89k	RM81k	21%
Total Compensation	RM422k	RM222k	100%

Speaking on an industry level, nearly 92% of total compensation represents salary, while the remainder of 8% is other remuneration. Sasbadi Holdings Berhad pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Sasbadi Holdings Berhad's Growth

Sasbadi Holdings Berhad's earnings per share (EPS) grew 15% per year over the last three years. Its revenue is up 35% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Sasbadi Holdings Berhad Been A Good Investment?

Given the total shareholder loss of 21% over three years, many shareholders in Sasbadi Holdings Berhad are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which makes us a bit uncomfortable) in Sasbadi Holdings Berhad we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.