Shareholders Will Most Likely Find Dataprep Holdings Bhd's (KLSE:DATAPRP) CEO Compensation Acceptable

The share price of Dataprep Holdings Bhd (KLSE:DATAPRP) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. The upcoming AGM on 30 June 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

View our latest analysis for Dataprep Holdings Bhd

Comparing Dataprep Holdings Bhd's CEO Compensation With the industry

At the time of writing, our data shows that Dataprep Holdings Bhd has a market capitalization of RM891m, and reported total annual CEO compensation of RM810k for the year to December 2020. That's a notable increase of 29% on last year. Notably, the salary which is RM568.0k, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from RM415m to RM1.7b, we found that the median CEO total compensation was RM1.1m. This suggests that Dataprep Holdings Bhd remunerates its CEO largely in line with the industry average. Furthermore, Mohamad Bin Mohamad Sabri directly owns RM685k worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 75% of total compensation represents salary, while the remainder of 25% is other remuneration. Our data reveals that Dataprep Holdings Bhd 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.

A Look at Dataprep Holdings Bhd's Growth Numbers

Over the last three years, Dataprep Holdings Bhd has shrunk its earnings per share by 4.0% per year. In the last year, its revenue is down 4.8%.

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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Dataprep Holdings Bhd Been A Good Investment?

Most shareholders would probably be pleased with Dataprep Holdings Bhd for providing a total return of 549% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns 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. We did our research and identified 4 warning signs (and 2 which are a bit concerning) in Dataprep Holdings Bhd we think you should know about.

Switching gears from Dataprep Holdings Bhd, 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. 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.
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