Increases to Metronic Global Berhad's (KLSE:MTRONIC) CEO Compensation Might Cool off for now

In the past three years, the share price of Metronic Global Berhad (KLSE:MTRONIC) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 30 November 2022 could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out the opportunities and risks within the MY Software industry.

How Does Total Compensation For Brian Hoo Compare With Other Companies In The Industry?

At the time of writing, our data shows that Metronic Global Berhad has a market capitalization of RM31m, and reported total annual CEO compensation of RM357k for the year to June 2022. That is, the compensation was roughly the same as last year. In particular, the salary of RM293.8k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below RM914m, we found that the median total CEO compensation was RM214k. Hence, we can conclude that Brian Hoo is remunerated higher than the industry median.

Component	2022	2021	Proportion (2022)
Salary	RM294k	RM310k	82%
Other	RM63k	RM41k	18%
Total Compensation	RM357k	RM350k	100%

Speaking on an industry level, nearly 82% of total compensation represents salary, while the remainder of 18% is other remuneration. Metronic Global Berhad is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

Metronic Global Berhad's Growth

Metronic Global Berhad's earnings per share (EPS) grew 18% per year over the last three years. In the last year, its revenue is up 34%.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Metronic Global Berhad Been A Good Investment?

With a total shareholder return of -92% over three years, Metronic Global Berhad shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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 a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 4 warning signs for Metronic Global Berhad that investors should be aware of in a dynamic business environment.

Important note: Metronic Global 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.

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.