LBI Capital Berhad's (KLSE:LBICAP) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• LBI Capital Berhad will host its Annual General Meeting on 28th of May
• Salary of RM864.0k is part of CEO Chin Ng's total remuneration
• The overall pay is 59% above the industry average
• LBI Capital Berhad's EPS grew by 25% over the past three years while total shareholder loss over the past three years was 11%

Our free stock report includes 4 warning signs investors should be aware of before investing in LBI Capital Berhad. Read for free now.

In the past three years, shareholders of LBI Capital Berhad (KLSE:LBICAP) have seen a loss on their investment. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 28th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See 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 RM50m, and reported total annual CEO compensation of RM1.1m for the year to December 2024. This was the same amount the CEO received in the prior year. Notably, the salary which is RM864.0k, represents most of the total compensation being paid.

For comparison, other companies in the Malaysian Real Estate industry with market capitalizations below RM854m, reported a median total CEO compensation of RM717k. Accordingly, our analysis reveals that LBI Capital Berhad pays Chin Ng north of the industry median. Furthermore, Chin Ng directly owns RM518k worth of shares in the company.

Component	2024	2023	Proportion (2024)
Salary	RM864k	RM864k	76%
Other	RM278k	RM278k	24%
Total Compensation	RM1.1m	RM1.1m	100%

Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. Although there is a difference in how total compensation is set, LBI Capital Berhad more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

LBI Capital Berhad's Growth

LBI Capital Berhad has seen its earnings per share (EPS) increase by 25% a year over the past three years. Its revenue is up 209% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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?

With a three year total loss of 11% for the shareholders, LBI Capital Berhad would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. 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. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 4 warning signs for LBI Capital Berhad (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from LBI Capital Berhad, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.