Here's Why Shareholders Should Examine Mr D.I.Y. Group (M) Berhad's (KLSE:MRDIY) CEO Compensation Package More Closely

Key Insights

• Mr D.I.Y. Group (M) Berhad to hold its Annual General Meeting on 5th of June
• CEO Adrian Ong's total compensation includes salary of RM809.0k
• The total compensation is similar to the average for the industry
• Mr D.I.Y. Group (M) Berhad's EPS declined by 9.6% over the past three years while total shareholder loss over the past three years was 28%

The results at Mr D.I.Y. Group (M) Berhad (KLSE:MRDIY) have been quite disappointing recently and CEO Adrian Ong bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 5th 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 Mr D.I.Y. Group (M) Berhad

How Does Total Compensation For Adrian Ong Compare With Other Companies In The Industry?

At the time of writing, our data shows that Mr D.I.Y. Group (M) Berhad has a market capitalization of RM17b, and reported total annual CEO compensation of RM1.2m 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 RM809.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Malaysian Specialty Retail industry with market capitalizations ranging from RM9.4b to RM30b, the reported median CEO total compensation was RM1.3m. This suggests that Mr D.I.Y. Group (M) Berhad remunerates its CEO largely in line with the industry average. What's more, Adrian Ong holds RM105m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	RM809k	RM819k	67%
Other	RM399k	RM402k	33%
Total Compensation	RM1.2m	RM1.2m	100%

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. Our data reveals that Mr D.I.Y. Group (M) Berhad allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Mr D.I.Y. Group (M) Berhad's Growth

Over the last three years, Mr D.I.Y. Group (M) Berhad has shrunk its earnings per share by 9.6% per year. It achieved revenue growth of 8.0% over the last year.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Mr D.I.Y. Group (M) Berhad Been A Good Investment?

Since shareholders would have lost about 28% over three years, some Mr D.I.Y. Group (M) Berhad investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. 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 can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Mr D.I.Y. Group (M) Berhad that investors should be aware of in a dynamic business environment.

Switching gears from Mr D.I.Y. Group (M) 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.