Here's Why Shareholders Should Examine Farlim Group (Malaysia) Bhd.'s (KLSE:FARLIM) CEO Compensation Package More Closely

Key Insights

• Farlim Group (Malaysia) Bhd will host its Annual General Meeting on 26th of June
• CEO Gait Tong Lim's total compensation includes salary of RM525.0k
• The overall pay is comparable to the industry average
• Over the past three years, Farlim Group (Malaysia) Bhd's EPS fell by 27% and over the past three years, the total loss to shareholders 15%

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Farlim Group (Malaysia) Bhd. (KLSE:FARLIM) has not performed well recently and CEO Gait Tong Lim 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 26th of June. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Farlim Group (Malaysia) Bhd

Comparing Farlim Group (Malaysia) Bhd.'s CEO Compensation With The Industry

At the time of writing, our data shows that Farlim Group (Malaysia) Bhd. has a market capitalization of RM30m, and reported total annual CEO compensation of RM541k for the year to December 2024. This means that the compensation hasn't changed much from last year. Notably, the salary which is RM525.0k, represents most of the total compensation being paid.

In comparison with other companies in the Malaysian Real Estate industry with market capitalizations under RM852m, the reported median total CEO compensation was RM759k. From this we gather that Gait Tong Lim is paid around the median for CEOs in the industry.

On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. Farlim Group (Malaysia) Bhd pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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.

Farlim Group (Malaysia) Bhd.'s Growth

Over the last three years, Farlim Group (Malaysia) Bhd. has shrunk its earnings per share by 27% per year. In the last year, its revenue is down 11%.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Farlim Group (Malaysia) Bhd. Been A Good Investment?

With a three year total loss of 15% for the shareholders, Farlim Group (Malaysia) Bhd. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Gait Tong receives almost all of their compensation through a salary. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Farlim Group (Malaysia) Bhd you should be aware of, and 2 of them are significant.

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.