It's Unlikely That The CEO Of Shun Wo Group Holdings Limited (HKG:1591) Will See A Huge Pay Rise This Year

Key Insights

• Shun Wo Group Holdings to hold its Annual General Meeting on 13th of September
• CEO Tony Wong's total compensation includes salary of HK$1.20m
• The total compensation is similar to the average for the industry
• Shun Wo Group Holdings' EPS grew by 106% over the past three years while total shareholder loss over the past three years was 57%

The underwhelming share price performance of Shun Wo Group Holdings Limited (HKG:1591) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 13th of September could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Shun Wo Group Holdings

How Does Total Compensation For Tony Wong Compare With Other Companies In The Industry?

At the time of writing, our data shows that Shun Wo Group Holdings Limited has a market capitalization of HK$64m, and reported total annual CEO compensation of HK$1.9m for the year to March 2024. That's a modest increase of 4.9% on the prior year. Notably, the salary which is HK$1.20m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.3m. This suggests that Shun Wo Group Holdings remunerates its CEO largely in line with the industry average.

Component	2024	2023	Proportion (2024)
Salary	HK$1.2m	HK$1.2m	63%
Other	HK$707k	HK$618k	37%
Total Compensation	HK$1.9m	HK$1.8m	100%

Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. Shun Wo Group Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Shun Wo Group Holdings Limited's Growth Numbers

Over the past three years, Shun Wo Group Holdings Limited has seen its earnings per share (EPS) grow by 106% per year. Its revenue is up 6.6% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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?

With a total shareholder return of -57% over three years, Shun Wo Group Holdings Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for Shun Wo Group Holdings you should be aware of, and 1 of them is a bit concerning.

Important note: Shun Wo Group Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.