Most Shareholders Will Probably Find That The Compensation For AE Multi Holdings Berhad's (KLSE:AEM) CEO Is Reasonable

Key Insights

• AE Multi Holdings Berhad's Annual General Meeting to take place on 24th of September
• Total pay for CEO Chao-Tung Yang includes RM180.0k salary
• Total compensation is 37% below industry average
• Over the past three years, AE Multi Holdings Berhad's EPS grew by 43% and over the past three years, the total loss to shareholders 78%

The performance at AE Multi Holdings Berhad (KLSE:AEM) has been rather lacklustre of late and shareholders may be wondering what CEO Chao-Tung Yang is planning to do about this. At the next AGM coming up on 24th of September, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for AE Multi Holdings Berhad

How Does Total Compensation For Chao-Tung Yang Compare With Other Companies In The Industry?

At the time of writing, our data shows that AE Multi Holdings Berhad has a market capitalization of RM22m, and reported total annual CEO compensation of RM216k for the year to March 2024. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at RM180.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Malaysian Electronic industry with market capitalizations under RM853m, the reported median total CEO compensation was RM341k. In other words, AE Multi Holdings Berhad pays its CEO lower than the industry median.

Component	2024	2023	Proportion (2024)
Salary	RM180k	RM180k	83%
Other	RM36k	RM40k	17%
Total Compensation	RM216k	RM220k	100%

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. AE Multi Holdings 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.

A Look at AE Multi Holdings Berhad's Growth Numbers

AE Multi Holdings Berhad's earnings per share (EPS) grew 43% per year over the last three years. In the last year, its revenue is up 8.4%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 AE Multi Holdings Berhad Been A Good Investment?

Few AE Multi Holdings Berhad shareholders would feel satisfied with the return of -78% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders are sitting on a loss is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for AE Multi Holdings Berhad (of which 2 are potentially serious!) that you should know about in order to have a holistic understanding of the stock.

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.