This article will reflect on the compensation paid to Gay Low who has served as CEO of Land & General Berhad (KLSE:L&G) since 2008. This analysis will also assess whether Land & General Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out 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 RM327m, and total annual CEO compensation was reported as RM1.0m for the year to March 2020. That's a notable decrease of 14% on last year. Notably, the salary which is RM866.8k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below RM808m, we found that the median total CEO compensation was RM802k. This suggests that Land & General Berhad remunerates its CEO largely in line with the industry average.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | RM867k | RM842k | 86% |
| Other | RM141k | RM332k | 14% |
| Total Compensation | RM1.0m | RM1.2m | 100% |
On an industry level, around 80% of total compensation represents salary and 20% is other remuneration. Although there is a difference in how total compensation is set, Land & General Berhad more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Land & General Berhad's Growth
Over the last three years, Land & General Berhad has shrunk its earnings per share by 35% per year. Its revenue is down 28% over the previous year.
The decline in EPS is a bit concerning. 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. 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 Land & General Berhad Been A Good Investment?
Given the total shareholder loss of 39% over three years, many shareholders in Land & General Berhad are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, Land & General Berhad pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
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 3 warning signs (and 1 which doesn't sit too well with us) in Land & General Berhad we think you should know about.
Switching gears from Land & General 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.
If you decide to trade Land & General Berhad, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted
New: AI Stock Screener & Alerts
Our new AI Stock Screener scans the market every day to uncover opportunities.
• Dividend Powerhouses (3%+ Yield)
• Undervalued Small Caps with Insider Buying
• High growth Tech and AI Companies
Or build your own from over 50 metrics.
This article by Simply Wall St is general in nature. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
About KLSE:L&G
Land & General Berhad
An investment holding company, engages in the property development business in Malaysia and Australia.
Excellent balance sheet slight.
