It's Unlikely That The CEO Of LYC Healthcare Berhad (KLSE:LYC) Will See A Huge Pay Rise This Year

Shareholders of LYC Healthcare Berhad (KLSE:LYC) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 22 September 2022. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for LYC Healthcare Berhad

Comparing LYC Healthcare Berhad's CEO Compensation With The Industry

Our data indicates that LYC Healthcare Berhad has a market capitalization of RM100m, and total annual CEO compensation was reported as RM837k for the year to March 2022. That's just a smallish increase of 7.4% on last year. Notably, the salary which is RM530.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below RM905m, we found that the median total CEO compensation was RM789k. So it looks like LYC Healthcare Berhad compensates Diong Sui in line with the median for the industry.

Component	2022	2021	Proportion (2022)
Salary	RM530k	RM443k	63%
Other	RM307k	RM336k	37%
Total Compensation	RM837k	RM779k	100%

On an industry level, roughly 79% of total compensation represents salary and 21% is other remuneration. LYC Healthcare Berhad pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at LYC Healthcare Berhad's Growth Numbers

Over the last three years, LYC Healthcare Berhad has not seen its earnings per share change much, though there is a slight positive movement. In the last year, its revenue is up 109%.

It's great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. We wouldn't say this is necessarily top notch growth, but it is certainly promising. 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 LYC Healthcare Berhad Been A Good Investment?

With a total shareholder return of -43% over three years, LYC Healthcare Berhad shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for LYC Healthcare Berhad (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

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.