It Looks Like Notion VTec Berhad's (KLSE:NOTION) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Notion VTec Berhad will host its Annual General Meeting on 1st of March
• CEO William Choo's total compensation includes salary of RM1.08m
• Total compensation is 224% above industry average
• Over the past three years, Notion VTec Berhad's EPS fell by 44% and over the past three years, the total loss to shareholders 49%

Notion VTec Berhad (KLSE:NOTION) has not performed well recently and CEO William Choo will probably need to up their game. At the upcoming AGM on 1st of March, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Notion VTec Berhad

How Does Total Compensation For William Choo Compare With Other Companies In The Industry?

Our data indicates that Notion VTec Berhad has a market capitalization of RM227m, and total annual CEO compensation was reported as RM1.4m for the year to September 2023. Notably, that's an increase of 36% over the year before. In particular, the salary of RM1.08m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Malaysian Electronic industry with market capitalizations below RM955m, reported a median total CEO compensation of RM432k. This suggests that William Choo is paid more than the median for the industry. What's more, William Choo holds RM16m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	RM1.1m	RM1.0m	77%
Other	RM319k	-	23%
Total Compensation	RM1.4m	RM1.0m	100%

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. There isn't a significant difference between Notion VTec Berhad and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Notion VTec Berhad's Growth Numbers

Notion VTec Berhad has reduced its earnings per share by 44% a year over the last three years. Its revenue is up 9.2% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Notion VTec Berhad Been A Good Investment?

The return of -49% over three years would not have pleased Notion VTec Berhad shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 Notion VTec Berhad (of which 2 are a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

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.