It Looks Like LBI Capital Berhad's (KLSE:LBICAP) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• LBI Capital Berhad will host its Annual General Meeting on 19th of June
• Salary of RM864.0k is part of CEO Chin Ng's total remuneration
• Total compensation is 74% above industry average
• Over the past three years, LBI Capital Berhad's EPS fell by 81% and over the past three years, the total loss to shareholders 17%

LBI Capital Berhad (KLSE:LBICAP) has not performed well recently and CEO Chin Ng will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 19th of June. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for LBI Capital Berhad

Comparing LBI Capital Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that LBI Capital Berhad has a market capitalization of RM59m, and reported total annual CEO compensation of RM1.1m for the year to December 2023. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at RM864.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Malaysian Real Estate industry with market capitalizations under RM943m, the reported median total CEO compensation was RM656k. This suggests that Chin Ng is paid more than the median for the industry. Furthermore, Chin Ng directly owns RM613k worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	RM864k	RM864k	76%
Other	RM278k	RM277k	24%
Total Compensation	RM1.1m	RM1.1m	100%

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. There isn't a significant difference between LBI Capital Berhad and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

LBI Capital Berhad's Growth

Over the last three years, LBI Capital Berhad has shrunk its earnings per share by 81% per year. It saw its revenue drop 39% over the last year.

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 LBI Capital Berhad Been A Good Investment?

Given the total shareholder loss of 17% over three years, many shareholders in LBI Capital Berhad are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for LBI Capital Berhad you should be aware of, and 2 of them are a bit unpleasant.

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.