Shareholders Will Probably Hold Off On Increasing Hong Kong Shanghai Alliance Holdings Limited's (HKG:1001) CEO Compensation For The Time Being

Key Insights

• Hong Kong Shanghai Alliance Holdings' Annual General Meeting to take place on 23rd of August
• Salary of HK$5.93m is part of CEO Andrew Yao's total remuneration
• The overall pay is 258% above the industry average
• Over the past three years, Hong Kong Shanghai Alliance Holdings' EPS grew by 262% and over the past three years, the total shareholder return was 5.4%

Performance at Hong Kong Shanghai Alliance Holdings Limited (HKG:1001) has been reasonably good and CEO Andrew Yao has done a decent job of steering the company in the right direction. 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 23rd of August. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Hong Kong Shanghai Alliance Holdings

Comparing Hong Kong Shanghai Alliance Holdings Limited's CEO Compensation With The Industry

Our data indicates that Hong Kong Shanghai Alliance Holdings Limited has a market capitalization of HK$153m, and total annual CEO compensation was reported as HK$7.9m for the year to March 2024. That's a modest increase of 4.4% on the prior year. We note that the salary portion, which stands at HK$5.93m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Trade Distributors industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.2m. This suggests that Andrew Yao is paid more than the median for the industry. Furthermore, Andrew Yao directly owns HK$22m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	HK$5.9m	HK$5.6m	75%
Other	HK$2.0m	HK$2.0m	25%
Total Compensation	HK$7.9m	HK$7.6m	100%

On an industry level, around 94% of total compensation represents salary and 6% is other remuneration. It's interesting to note that Hong Kong Shanghai Alliance Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Hong Kong Shanghai Alliance Holdings Limited's Growth

Hong Kong Shanghai Alliance Holdings Limited has seen its earnings per share (EPS) increase by 262% a year over the past 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. 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 Hong Kong Shanghai Alliance Holdings Limited Been A Good Investment?

Hong Kong Shanghai Alliance Holdings Limited has not done too badly by shareholders, with a total return of 5.4%, over three years. It would be nice to see that metric improve in the future. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which is significant) in Hong Kong Shanghai Alliance Holdings we think you should know about.

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.