Shun Wo Group Holdings Limited (HKG:1591) has not performed well recently and CEO Tony Wong will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 09 September 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.
Comparing Shun Wo Group Holdings Limited's CEO Compensation With the industry
Our data indicates that Shun Wo Group Holdings Limited has a market capitalization of HK$148m, and total annual CEO compensation was reported as HK$1.8m for the year to March 2021. This was the same amount the CEO received in the prior year. We note that the salary portion, which stands at HK$1.20m constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.8m. So it looks like Shun Wo Group Holdings compensates Tony Wong in line with the median for the industry.
Speaking on an industry level, nearly 90% of total compensation represents salary, while the remainder of 10% is other remuneration. Shun Wo Group Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Shun Wo Group Holdings Limited's Growth
Over the last three years, Shun Wo Group Holdings Limited has shrunk its earnings per share by 46% per year. It achieved revenue growth of 7.4% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Shun Wo Group Holdings Limited Been A Good Investment?
The return of -58% over three years would not have pleased Shun Wo Group Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
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. We did our research and identified 3 warning signs (and 1 which can't be ignored) in Shun Wo Group Holdings we think you should know about.
Switching gears from Shun Wo 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.
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