Yahoo Finance Shareholders May Be More Conservative With Hong Leong Financial Group Berhad's (KLSE:HLFG) CEO Compensation For Now
Key Insights
Hong Leong Financial Group Berhad to hold its Annual General Meeting on 31st of October
Salary of RM3.18m is part of CEO Kong Khoon Tan's total remuneration
Total compensation is 727% above industry average
Hong Leong Financial Group Berhad's total shareholder return over the past three years was 26% while its EPS grew by 15% over the past three years
Under the guidance of CEO Kong Khoon Tan, Hong Leong Financial Group Berhad (KLSE:HLFG) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 31st of October. However, some shareholders will still be cautious of paying the CEO excessively.
View our latest analysis for Hong Leong Financial Group Berhad
How Does Total Compensation For Kong Khoon Tan Compare With Other Companies In The Industry?
At the time of writing, our data shows that Hong Leong Financial Group Berhad has a market capitalization of RM20b, and reported total annual CEO compensation of RM11m for the year to June 2023. That's a notable increase of 8.5% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at RM3.2m.
In comparison with other companies in the Malaysian Banks industry with market capitalizations ranging from RM9.6b to RM31b, the reported median CEO total compensation was RM1.4m. Hence, we can conclude that Kong Khoon Tan is remunerated higher than the industry median. Furthermore, Kong Khoon Tan directly owns RM4.4m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | RM3.2m | RM3.0m | 28% |
Other | RM8.2m | RM7.5m | 72% |
Total Compensation | RM11m | RM11m | 100% |
Talking in terms of the industry, salary represented approximately 41% of total compensation out of all the companies we analyzed, while other remuneration made up 59% of the pie. In Hong Leong Financial Group Berhad's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Hong Leong Financial Group Berhad's Growth Numbers
Hong Leong Financial Group Berhad has seen its earnings per share (EPS) increase by 15% a year over the past three years. Its revenue is up 3.7% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Hong Leong Financial Group Berhad Been A Good Investment?
Hong Leong Financial Group Berhad has served shareholders reasonably well, with a total return of 26% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
To Conclude...
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.
So you may want to check if insiders are buying Hong Leong Financial Group Berhad shares with their own money (free access).
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.
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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.
