LYC Healthcare Berhad's (KLSE:LYC) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• LYC Healthcare Berhad's Annual General Meeting to take place on 21st of September
• CEO Diong Sui's total compensation includes salary of RM660.0k
• The total compensation is 196% higher than the average for the industry
• LYC Healthcare Berhad's EPS grew by 9.8% over the past three years while total shareholder loss over the past three years was 49%

In the past three years, the share price of LYC Healthcare Berhad (KLSE:LYC) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 21st of September. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for LYC Healthcare Berhad

Comparing LYC Healthcare Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that LYC Healthcare Berhad has a market capitalization of RM123m, and reported total annual CEO compensation of RM1.0m for the year to March 2023. We note that's an increase of 22% above last year. In particular, the salary of RM660.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Malaysian IT industry with market capitalizations under RM936m, the reported median total CEO compensation was RM345k. This suggests that Diong Sui is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	RM660k	RM530k	65%
Other	RM359k	RM307k	35%
Total Compensation	RM1.0m	RM837k	100%

Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. LYC Healthcare Berhad sets aside a smaller share of compensation for salary, in comparison to the overall 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

LYC Healthcare Berhad's earnings per share (EPS) grew 9.8% per year over the last three years. It achieved revenue growth of 32% over the last year.

It's great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has LYC Healthcare Berhad Been A Good Investment?

With a total shareholder return of -49% over three years, LYC Healthcare Berhad shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for LYC Healthcare Berhad (1 is potentially serious!) 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.