Shareholders May Be More Conservative With Land & General Berhad's (KLSE:L&G) CEO Compensation For Now

Key Insights

• Land & General Berhad's Annual General Meeting to take place on 10th of September
• Total pay for CEO Gay Low includes RM1.04m salary
• The overall pay is 64% above the industry average
• Over the past three years, Land & General Berhad's EPS fell by 5.8% and over the past three years, the total shareholder return was 15%

The share price of Land & General Berhad (KLSE:L&G) 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 10th of September may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. 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.

View our latest analysis for Land & General Berhad

How Does Total Compensation For Gay Low Compare With Other Companies In The Industry?

Our data indicates that Land & General Berhad has a market capitalization of RM372m, and total annual CEO compensation was reported as RM1.5m for the year to March 2024. We note that's an increase of 11% above last year. Notably, the salary which is RM1.04m, represents most of the total compensation being paid.

In comparison with other companies in the Malaysian Real Estate industry with market capitalizations under RM874m, the reported median total CEO compensation was RM900k. This suggests that Gay Low is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	RM1.0m	RM926k	70%
Other	RM443k	RM405k	30%
Total Compensation	RM1.5m	RM1.3m	100%

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Our data reveals that Land & General Berhad allocates salary more or less in line with the wider market. 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.

A Look at Land & General Berhad's Growth Numbers

Over the last three years, Land & General Berhad has shrunk its earnings per share by 5.8% per year. In the last year, its revenue is down 17%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Land & General Berhad Been A Good Investment?

With a total shareholder return of 15% over three years, Land & General 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.

In Summary...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Land & General Berhad (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.