This Is Why Complete Logistic Services Berhad's (KLSE:COMPLET) CEO Compensation Looks Appropriate

Despite strong share price growth of 242% for Complete Logistic Services Berhad (KLSE:COMPLET) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 09 September 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for Complete Logistic Services Berhad

Comparing Complete Logistic Services Berhad's CEO Compensation With the industry

Our data indicates that Complete Logistic Services Berhad has a market capitalization of RM175m, and total annual CEO compensation was reported as RM679k for the year to March 2021. That's a notable decrease of 8.0% on last year. We note that the salary of RM384.0k makes up a sizeable portion of the total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below RM839m, we found that the median total CEO compensation was RM685k. So it looks like Complete Logistic Services Berhad compensates Hee Law in line with the median for the industry.

Component	2021	2020	Proportion (2021)
Salary	RM384k	RM384k	57%
Other	RM295k	RM354k	43%
Total Compensation	RM679k	RM738k	100%

On an industry level, around 88% of total compensation represents salary and 12% is other remuneration. It's interesting to note that Complete Logistic Services Berhad allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Complete Logistic Services Berhad's Growth

Over the last three years, Complete Logistic Services Berhad has shrunk its earnings per share by 27% per year. In the last year, its revenue is down 61%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Complete Logistic Services Berhad Been A Good Investment?

We think that the total shareholder return of 242%, over three years, would leave most Complete Logistic Services Berhad shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

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 did our research and spotted 4 warning signs for Complete Logistic Services Berhad that investors should look into moving forward.

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.
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