Shareholders Will Likely Find Xox Networks Berhad's (KLSE:XOXNET) CEO Compensation Acceptable

Key Insights

• Xox Networks Berhad's Annual General Meeting to take place on 27th of November
• Total pay for CEO Kien Keat Koo includes RM210.0k salary
• The overall pay is 40% below the industry average
• Over the past three years, Xox Networks Berhad's EPS grew by 23% and over the past three years, the total loss to shareholders 87%

Shareholders may be wondering what CEO Kien Keat Koo plans to do to improve the less than great performance at Xox Networks Berhad (KLSE:XOXNET) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 27th of November. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for Xox Networks Berhad

How Does Total Compensation For Kien Keat Koo Compare With Other Companies In The Industry?

Our data indicates that Xox Networks Berhad has a market capitalization of RM40m, and total annual CEO compensation was reported as RM314k for the year to June 2023. Notably, that's an increase of 96% over the year before. Notably, the salary which is RM210.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Malaysian Electronic industry with market capitalizations below RM932m, we found that the median total CEO compensation was RM519k. That is to say, Kien Keat Koo is paid under the industry median.

Component	2023	2021	Proportion (2023)
Salary	RM210k	RM98k	67%
Other	RM104k	RM62k	33%
Total Compensation	RM314k	RM160k	100%

On an industry level, around 72% of total compensation represents salary and 28% is other remuneration. Although there is a difference in how total compensation is set, Xox Networks Berhad more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Xox Networks Berhad's Growth Numbers

Over the past three years, Xox Networks Berhad has seen its earnings per share (EPS) grow by 23% per year. Its revenue is down 17% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Xox Networks Berhad Been A Good Investment?

The return of -87% over three years would not have pleased Xox Networks Berhad shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders have earned a negative share price return is certainly disconcerting. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key question may be why the fundamentals have not yet been reflected into the share price. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for Xox Networks Berhad that investors should be aware of in a dynamic business environment.

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.

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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.