Shareholders May Not Be So Generous With Sheung Yue Group Holdings Limited's (HKG:1633) CEO Compensation And Here's Why

In the past three years, the share price of Sheung Yue Group Holdings Limited (HKG:1633) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 18 August 2021 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.

See our latest analysis for Sheung Yue Group Holdings

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

At the time of writing, our data shows that Sheung Yue Group Holdings Limited has a market capitalization of HK$127m, and reported total annual CEO compensation of HK$1.6m for the year to March 2021. We note that's a small decrease of 5.7% on last year. We note that the salary portion, which stands at HK$1.63m 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. From this we gather that Edmond Chan is paid around the median for CEOs in the industry.

Component	2021	2020	Proportion (2021)
Salary	HK$1.6m	HK$1.7m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$1.6m	HK$1.7m	100%

On an industry level, around 90% of total compensation represents salary and 10% is other remuneration. Investors will find it interesting that Sheung Yue Group Holdings 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 Sheung Yue Group Holdings Limited's Growth Numbers

Sheung Yue Group Holdings Limited has seen its earnings per share (EPS) increase by 53% a year over the past three years. It saw its revenue drop 21% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization 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 -55% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Edmond 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. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which makes us a bit uncomfortable) in Sheung Yue Group Holdings we think you should know about.

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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