This Is Why Shareholders May Want To Hold Back On A Pay Rise For Realord Group Holdings Limited's (HKG:1196) CEO

Key Insights

• Realord Group Holdings' Annual General Meeting to take place on 6th of June
• CEO Jiaohua Su's total compensation includes salary of HK$2.40m
• The total compensation is 33% less than the average for the industry
• Realord Group Holdings' three-year loss to shareholders was 54% while its EPS was down 56% over the past three years

The underwhelming performance at Realord Group Holdings Limited (HKG:1196) recently has probably not pleased shareholders. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 6th of June. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

View our latest analysis for Realord Group Holdings

How Does Total Compensation For Jiaohua Su Compare With Other Companies In The Industry?

According to our data, Realord Group Holdings Limited has a market capitalization of HK$7.7b, and paid its CEO total annual compensation worth HK$2.4m over the year to December 2023. This was the same amount the CEO received in the prior year. Notably, the salary which is HK$2.40m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Trade Distributors industry with market capitalizations ranging between HK$3.1b and HK$13b had a median total CEO compensation of HK$3.6m. This suggests that Jiaohua Su is paid below the industry median.

Component	2023	2022	Proportion (2023)
Salary	HK$2.4m	HK$2.4m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$2.4m	HK$2.4m	100%

On an industry level, roughly 92% of total compensation represents salary and 8% is other remuneration. Realord Group Holdings has gone down a largely traditional route, paying Jiaohua Su a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Realord Group Holdings Limited's Growth

Over the last three years, Realord Group Holdings Limited has shrunk its earnings per share by 56% per year. It saw its revenue drop 33% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Realord Group Holdings Limited Been A Good Investment?

With a total shareholder return of -54% over three years, Realord Group Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Jiaohua receives almost all of their compensation through a salary. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Realord Group Holdings (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Realord Group Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.