Yahoo Finance We Think Some Shareholders May Hesitate To Increase Alam Maritim Resources Berhad's (KLSE:ALAM) CEO Compensation
The underwhelming share price performance of Alam Maritim Resources Berhad (KLSE:ALAM) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 14 December 2022. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
See our latest analysis for Alam Maritim Resources Berhad
How Does Total Compensation For Azmi Bin Ahmad Compare With Other Companies In The Industry?
Our data indicates that Alam Maritim Resources Berhad has a market capitalization of RM38m, and total annual CEO compensation was reported as RM1.5m for the year to December 2021. That's a notable increase of 39% on last year. Notably, the salary which is RM1.19m, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below RM879m, we found that the median total CEO compensation was RM1.3m. So it looks like Alam Maritim Resources Berhad compensates Azmi Bin Ahmad in line with the median for the industry.
Component | 2021 | 2020 | Proportion (2021) |
Salary | RM1.2m | RM943k | 81% |
Other | RM274k | RM113k | 19% |
Total Compensation | RM1.5m | RM1.1m | 100% |
Speaking on an industry level, nearly 68% of total compensation represents salary, while the remainder of 32% is other remuneration. Alam Maritim Resources Berhad pays out 81% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Alam Maritim Resources Berhad's Growth Numbers
Over the past three years, Alam Maritim Resources Berhad has seen its earnings per share (EPS) grow by 17% per year. Its revenue is up 39% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Alam Maritim Resources Berhad Been A Good Investment?
With a total shareholder return of -79% over three years, Alam Maritim Resources Berhad shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 4 warning signs for Alam Maritim Resources Berhad that investors should be aware of in a dynamic business environment.
Important note: Alam Maritim Resources 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.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
