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Shareholders May Be A Bit More Conservative With Vsolar Group Berhad's (KLSE:VSOLAR) CEO Compensation For Now

Key Insights

  • Vsolar Group Berhad will host its Annual General Meeting on 6th of December

  • Salary of RM193.0k is part of CEO Kien Koo's total remuneration

  • Total compensation is similar to the industry average

  • Over the past three years, Vsolar Group Berhad's EPS grew by 59% and over the past three years, the total loss to shareholders 90%

Shareholders of Vsolar Group Berhad (KLSE:VSOLAR) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 6th of December could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Vsolar Group Berhad

Comparing Vsolar Group Berhad's CEO Compensation With The Industry

At the time of writing, our data shows that Vsolar Group Berhad has a market capitalization of RM21m, and reported total annual CEO compensation of RM344k for the year to June 2023. We note that's an increase of 22% above last year. Notably, the salary which is RM193.0k, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the Malaysian Electronic industry with market capitalizations below RM931m, reported a median total CEO compensation of RM430k. From this we gather that Kien Koo is paid around the median for CEOs in the industry.

Component

2023

2022

Proportion (2023)

Salary

RM193k

-

56%

Other

RM151k

RM282k

44%

Total Compensation

RM344k

RM282k

100%

On an industry level, around 71% of total compensation represents salary and 29% is other remuneration. Vsolar Group Berhad pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

Vsolar Group Berhad's Growth

Vsolar Group Berhad's earnings per share (EPS) grew 59% per year over the last three years. It saw its revenue drop 13% over the last 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 Vsolar Group Berhad Been A Good Investment?

With a total shareholder return of -90% over three years, Vsolar Group Berhad shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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.

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 identified 4 warning signs for Vsolar Group Berhad (3 are a bit unpleasant!) that you should be aware of before investing here.

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.

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.

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