Shareholders May Be A Bit More Conservative With Sheung Yue Group Holdings Limited's (HKG:1633) CEO Compensation For Now

Key Insights

• Sheung Yue Group Holdings to hold its Annual General Meeting on 1st of August
• Total pay for CEO Edmond Chan includes HK$1.63m salary
• Total compensation is similar to the industry average
• Over the past three years, Sheung Yue Group Holdings' EPS grew by 43% and over the past three years, the total loss to shareholders 35%

The underwhelming share price performance of Sheung Yue Group Holdings Limited (HKG:1633) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 1st of August. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Sheung Yue Group Holdings

How Does Total Compensation For Edmond Chan Compare With Other Companies In The Industry?

Our data indicates that Sheung Yue Group Holdings Limited has a market capitalization of HK$71m, and total annual CEO compensation was reported as HK$1.8m for the year to March 2024. That's mostly flat as compared to the prior year's compensation. In particular, the salary of HK$1.63m, makes up a huge portion of the total compensation being paid to the CEO.

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$2.2m. From this we gather that Edmond Chan is paid around the median for CEOs in the industry.

Component	2024	2023	Proportion (2024)
Salary	HK$1.6m	HK$1.6m	92%
Other	HK$137k	HK$118k	8%
Total Compensation	HK$1.8m	HK$1.7m	100%

Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. There isn't a significant difference between Sheung Yue Group Holdings and the broader market, in terms of salary allocation in the overall compensation package. 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.

A Look at Sheung Yue Group Holdings Limited's Growth Numbers

Sheung Yue Group Holdings Limited's earnings per share (EPS) grew 43% per year over the last three years. Its revenue is up 15% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Sheung Yue Group Holdings Limited Been A Good Investment?

Few Sheung Yue Group Holdings Limited shareholders would feel satisfied with the return of -35% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Sheung Yue Group Holdings (of which 2 are concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Sheung Yue 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com