Shareholders May Not Be So Generous With Binasat Communications Berhad's (KLSE:BINACOM) CEO Compensation And Here's Why

Key Insights

• Binasat Communications Berhad to hold its Annual General Meeting on 20th of June
• Salary of RM492.0k is part of CEO Zulamran Bin Hamat's total remuneration
• The total compensation is 334% higher than the average for the industry
• Over the past three years, Binasat Communications Berhad's EPS fell by 54% and over the past three years, the total loss to shareholders 54%

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In the past three years, the share price of Binasat Communications Berhad (KLSE:BINACOM) has struggled to grow and now shareholders are sitting on a loss. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. Shareholders will have a chance to take their concerns to the board at the next AGM on 20th of June and vote on resolutions including executive compensation, which studies show may have an impact on company performance. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

Check out our latest analysis for Binasat Communications Berhad

How Does Total Compensation For Zulamran Bin Hamat Compare With Other Companies In The Industry?

At the time of writing, our data shows that Binasat Communications Berhad has a market capitalization of RM55m, and reported total annual CEO compensation of RM637k for the year to December 2024. We note that's a decrease of 37% compared to last year. Notably, the salary which is RM492.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Malaysian Telecom industry with market capitalizations below RM849m, we found that the median total CEO compensation was RM147k. Accordingly, our analysis reveals that Binasat Communications Berhad pays Zulamran Bin Hamat north of the industry median. What's more, Zulamran Bin Hamat holds RM263k worth of shares in the company in their own name.

Speaking on an industry level, nearly 71% of total compensation represents salary, while the remainder of 29% is other remuneration. Although there is a difference in how total compensation is set, Binasat Communications Berhad more or less reflects the market in terms of setting the salary. 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 Binasat Communications Berhad's Growth Numbers

Binasat Communications Berhad has reduced its earnings per share by 54% a year over the last three years. Its revenue is up 21% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Binasat Communications Berhad Been A Good Investment?

The return of -54% over three years would not have pleased Binasat Communications Berhad shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. Shareholders will get the chance at the upcoming AGM 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 an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 1 which can't be ignored) in Binasat Communications Berhad we think you should know about.

Important note: Binasat Communications 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.

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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.