We Think Dataprep Holdings Bhd's (KLSE:DATAPRP) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Dataprep Holdings Bhd will host its Annual General Meeting on 27th of June
• CEO Mohamad Bin Mohamad Sabri's total compensation includes salary of RM568.0k
• The overall pay is comparable to the industry average
• Dataprep Holdings Bhd's EPS declined by 25% over the past three years while total shareholder loss over the past three years was 88%

The results at Dataprep Holdings Bhd (KLSE:DATAPRP) have been quite disappointing recently and CEO Mohamad Bin Mohamad Sabri 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 27th 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Dataprep Holdings Bhd

Comparing Dataprep Holdings Bhd's CEO Compensation With The Industry

According to our data, Dataprep Holdings Bhd has a market capitalization of RM118m, and paid its CEO total annual compensation worth RM671k over the year to December 2023. There was no change in the compensation compared to last year. In particular, the salary of RM568.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Malaysia IT industry with market capitalizations below RM942m, reported a median total CEO compensation of RM671k. So it looks like Dataprep Holdings Bhd compensates Mohamad Bin Mohamad Sabri in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	RM568k	RM568k	85%
Other	RM103k	RM103k	15%
Total Compensation	RM671k	RM671k	100%

On an industry level, around 78% of total compensation represents salary and 22% is other remuneration. Our data reveals that Dataprep Holdings Bhd allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Dataprep Holdings Bhd's Growth

Over the last three years, Dataprep Holdings Bhd has shrunk its earnings per share by 25% per year. In the last year, its revenue is up 6.3%.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. 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 Dataprep Holdings Bhd Been A Good Investment?

The return of -88% over three years would not have pleased Dataprep Holdings Bhd shareholders. This suggests it would be unwise for the company to pay the CEO too 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, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Dataprep Holdings Bhd (1 is a bit unpleasant!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com