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

Simply Wall St
September 08, 2021
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The underwhelming share price performance of Land & General Berhad (KLSE:L&G) in the past three years would have disappointed many shareholders. Per share earnings growth is also poor, despite revenues growing. Shareholders will have a chance to take their concerns to the board at the next AGM on 15 September 2021 and vote on resolutions including executive compensation, which studies show may have an impact on company performance. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

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 RM357m, and total annual CEO compensation was reported as RM1.2m for the year to March 2021. Notably, that's an increase of 16% over the year before. In particular, the salary of RM866.8k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below RM831m, reported a median total CEO compensation of RM750k. Accordingly, our analysis reveals that Land & General Berhad pays Gay Low north of the industry median.

Component20212020Proportion (2021)
Salary RM867k RM867k 74%
Other RM299k RM141k 26%
Total CompensationRM1.2m RM1.0m100%

Talking in terms of the industry, salary represented approximately 74% of total compensation out of all the companies we analyzed, while other remuneration made up 26% of the pie. There isn't a significant difference between Land & General Berhad and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

KLSE:L&G CEO Compensation September 8th 2021

A Look at Land & General Berhad's Growth Numbers

Land & General Berhad has reduced its earnings per share by 11% a year over the last three years. It achieved revenue growth of 40% over the last year.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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?

Since shareholders would have lost about 27% over three years, some Land & General Berhad investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

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 Land & General Berhad you should be aware of, and 1 of them doesn't sit too well with us.

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