Digistar Corporation Berhad's (KLSE:DIGISTA) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Digistar Corporation Berhad's Annual General Meeting to take place on 10th of March
• Total pay for CEO Wira Lee includes RM1.30m salary
• Total compensation is 62% above industry average
• Digistar Corporation Berhad's EPS declined by 5.4% over the past three years while total shareholder loss over the past three years was 7.2%

The results at Digistar Corporation Berhad (KLSE:DIGISTA) have been quite disappointing recently and CEO Wira Lee 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 10th of March. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Digistar Corporation Berhad

Comparing Digistar Corporation Berhad's CEO Compensation With The Industry

Our data indicates that Digistar Corporation Berhad has a market capitalization of RM36m, and total annual CEO compensation was reported as RM1.3m for the year to September 2022. We note that's an increase of 33% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth RM1.3m.

On comparing similar-sized companies in the Malaysian IT industry with market capitalizations below RM894m, we found that the median total CEO compensation was RM798k. Accordingly, our analysis reveals that Digistar Corporation Berhad pays Wira Lee north of the industry median.

Component	2022	2021	Proportion (2022)
Salary	RM1.3m	RM972k	100%
Other	-	-	-
Total Compensation	RM1.3m	RM972k	100%

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. At the company level, Digistar Corporation Berhad pays Wira Lee solely through a salary, preferring to go down a conventional route. 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.

A Look at Digistar Corporation Berhad's Growth Numbers

Over the last three years, Digistar Corporation Berhad has shrunk its earnings per share by 5.4% per year. Its revenue is up 12% over the last year.

Few shareholders would be pleased to read that EPS have declined. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Digistar Corporation Berhad Been A Good Investment?

With a three year total loss of 7.2% for the shareholders, Digistar Corporation Berhad would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Digistar Corporation Berhad rewards its CEO solely through a salary, ignoring non-salary benefits completely. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Digistar Corporation Berhad (2 are significant!) that you should be aware of before investing here.

Important note: Digistar Corporation Berhad is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.