Why We Think Mesiniaga Berhad's (KLSE:MSNIAGA) CEO Compensation Is Not Excessive At All

Key Insights

• Mesiniaga Berhad will host its Annual General Meeting on 4th of June
• Salary of RM665.0k is part of CEO Wan Mohamed Bin Wan Mahmood's total remuneration
• The overall pay is comparable to the industry average
• Mesiniaga Berhad's total shareholder return over the past three years was 8.0% while its EPS grew by 81% over the past three years

Performance at Mesiniaga Berhad (KLSE:MSNIAGA) has been reasonably good and CEO Wan Mohamed Bin Wan Mahmood has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 4th of June. We present our case of why we think CEO compensation looks fair.

View our latest analysis for Mesiniaga Berhad

Comparing Mesiniaga Berhad's CEO Compensation With The Industry

Our data indicates that Mesiniaga Berhad has a market capitalization of RM97m, and total annual CEO compensation was reported as RM873k for the year to December 2023. We note that's a decrease of 37% compared to last year. We note that the salary portion, which stands at RM665.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Malaysia IT industry with market capitalizations below RM939m, we found that the median total CEO compensation was RM728k. So it looks like Mesiniaga Berhad compensates Wan Mohamed Bin Wan Mahmood in line with the median for the industry. Furthermore, Wan Mohamed Bin Wan Mahmood directly owns RM5.6m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	RM665k	RM1.1m	76%
Other	RM208k	RM267k	24%
Total Compensation	RM873k	RM1.4m	100%

Talking in terms of the industry, salary represented approximately 78% of total compensation out of all the companies we analyzed, while other remuneration made up 22% of the pie. Although there is a difference in how total compensation is set, Mesiniaga Berhad more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Mesiniaga Berhad's Growth

Mesiniaga Berhad has seen its earnings per share (EPS) increase by 81% a year over the past three years. In the last year, its revenue is down 11%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Mesiniaga Berhad Been A Good Investment?

With a total shareholder return of 8.0% over three years, Mesiniaga Berhad has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Mesiniaga Berhad that you should be aware of before investing.

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.