Shareholders Will Probably Hold Off On Increasing Southern Acids (M) Berhad’s (KLSE:SAB) CEO Compensation For The Time Being

Alright, fellow mall moles, let’s crack this case wide open. Southern Acids (M) Berhad (SAB), a KLSE-listed company, is under the microscope, and not just because of its recent 15% share price bump. Nope, the real drama’s in the numbers—like that 32% annual decline in earnings per share (EPS) over three years. That’s a red flag waving harder than a shopaholic at a Black Friday sale. And with the Annual General Meeting (AGM) looming on August 29th, shareholders are sharpening their pencils and their questions. Let’s dig into why executive compensation is the hottest topic at the AGM, and why shareholders are probably gonna hit pause on any raises.

The EPS Mystery: Why Is Southern Acids Bleeding Profits?

First off, let’s talk about that EPS decline. A 32% annual drop in earnings is like finding out your favorite thrift store closed—devastating. Meanwhile, revenue’s been growing, but not fast enough to keep up with the bleeding. The market’s already pricing in a 9% decline in the share price, but that’s just the tip of the iceberg. Shareholders are gonna want answers: Is this a cost management issue? Operational inefficiency? Or is the industry just that cutthroat?

And here’s the kicker—private companies own 58% of SAB. That’s a lot of control, and shareholders are gonna be watching like hawks to see if those private interests align with theirs. Plus, those steady dividends? They’re great for income investors, but if earnings keep tanking, those payouts might be unsustainable. Time to audit that dividend policy, folks.

Executive Compensation: Is the CEO Really Worth the Paycheck?

Now, let’s talk about the real elephant in the room—executive compensation. The CEO’s total yearly compensation is MYR962.50K, with 53.9% in salary and 46.1% in bonuses and stock options. But here’s the thing: with EPS tanking, shareholders are gonna be like, “Hold up. Why should we approve a raise when the company’s performance is in the toilet?”

This isn’t just a Southern Acids problem, either. Look at Asia File and Yinson Holdings—shareholders there are also pushing back on executive pay hikes when results are lackluster. And while the CEO does own 0.069% of the company, that’s barely a rounding error. It’s not enough to guarantee they’re thinking long-term.

The compensation structure’s supposed to be performance-based, but with EPS dropping like a hot potato, shareholders are gonna demand transparency. What metrics are they using to justify those bonuses? Are they even tied to sustainable profitability? Time to put the CEO’s pay under the microscope.

Share Buy-Backs and Related Party Transactions: What’s Really Going On?

Then there’s the proposed share buy-back—up to 10% of issued shares. On paper, it sounds like a vote of confidence, but is the stock really undervalued? Shareholders need to do their homework here. And those recurrent related party transactions? They’re a red flag for potential conflicts of interest. Are these deals fair to minority shareholders, or is there some backroom dealing going on?

The AGM’s the perfect time to demand transparency. Shareholders need to see the numbers, understand the strategy, and make sure the board’s not just patting themselves on the back while the company burns.

The Bottom Line: Shareholders Aren’t Buying It (Yet)

So, what’s the verdict? Shareholders are probably gonna hold off on increasing CEO compensation until they see real, sustainable improvements. The AGM’s their chance to demand answers—why is EPS declining, what’s the plan to fix it, and how does executive pay align with performance?

The share buy-back and related party transactions need scrutiny too. Are they in the best interest of all shareholders, or just a few insiders? And that dividend policy? It’s time for a reality check.

Southern Acids (M) Berhad is at a crossroads. The board’s got some serious explaining to do, and shareholders aren’t in the mood to rubber-stamp anything without proof of a turnaround. The AGM’s the moment of truth—will the company step up, or will shareholders walk away? Stay tuned, mall moles. This case is far from closed.