Shareholders May Be More Conservative With LYC Healthcare Berhad's (KLSE:LYC) CEO Compensation For Now

Key Insights

• LYC Healthcare Berhad will host its Annual General Meeting on 27th of September
• Total pay for CEO Diong Sui includes RM862.0k salary
• Total compensation is 111% above industry average
• Over the past three years, LYC Healthcare Berhad's EPS fell by 0.7% and over the past three years, the total loss to shareholders 68%

The underwhelming share price performance of LYC Healthcare Berhad (KLSE:LYC) in the past three years would have disappointed many shareholders. Per share earnings growth is also poor, despite revenues growing. Shareholders will have a chance to take their concerns to the board at the next AGM on 27th of September and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

See our latest analysis for LYC Healthcare Berhad

How Does Total Compensation For Diong Sui Compare With Other Companies In The Industry?

According to our data, LYC Healthcare Berhad has a market capitalization of RM61m, and paid its CEO total annual compensation worth RM1.2m over the year to March 2024. We note that's an increase of 16% above last year. Notably, the salary which is RM862.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Malaysian IT industry with market capitalizations below RM841m, we found that the median total CEO compensation was RM562k. Accordingly, our analysis reveals that LYC Healthcare Berhad pays Diong Sui north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	RM862k	RM660k	73%
Other	RM325k	RM359k	27%
Total Compensation	RM1.2m	RM1.0m	100%

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. In LYC Healthcare Berhad's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

LYC Healthcare Berhad's Growth

Earnings per share at LYC Healthcare Berhad are much the same as they were three years ago, albeit slightly lower. Its revenue is up 46% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 LYC Healthcare Berhad Been A Good Investment?

With a total shareholder return of -68% over three years, LYC Healthcare Berhad shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In 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 is in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which is significant) in LYC Healthcare Berhad we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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

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.