Shareholders Will Probably Hold Off On Increasing Vision Fame International Holding Limited's (HKG:1315) CEO Compensation For The Time Being

Shareholders of Vision Fame International Holding Limited (HKG:1315) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 30 September 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Vision Fame International Holding

Comparing Vision Fame International Holding Limited's CEO Compensation With the industry

Our data indicates that Vision Fame International Holding Limited has a market capitalization of HK$232m, and total annual CEO compensation was reported as HK$2.4m for the year to March 2021. This was the same amount the CEO received in the prior year. In particular, the salary of HK$2.40m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.8m. Hence, we can conclude that Chit Chau is remunerated higher than the industry median. Moreover, Chit Chau also holds HK$19m worth of Vision Fame International Holding stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	HK$2.4m	HK$2.4m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$2.4m	HK$2.4m	100%

Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. Investors will find it interesting that Vision Fame International Holding pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Vision Fame International Holding Limited's Growth Numbers

Vision Fame International Holding Limited's earnings per share (EPS) grew 65% per year over the last three years. Its revenue is down 16% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Vision Fame International Holding Limited Been A Good Investment?

The return of -82% over three years would not have pleased Vision Fame International Holding Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Chit receives almost all of their compensation through a salary. 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 5 warning signs for Vision Fame International Holding that you should be aware of before investing.

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.
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