Shareholders May Find It Hard To Justify Increasing Shing Chi Holdings Limited's (HKG:1741) CEO Compensation For Now

Key Insights

• Shing Chi Holdings' Annual General Meeting to take place on 19th of March
• Salary of HK$1.85m is part of CEO Chi Keung Lau's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Shing Chi Holdings' EPS grew by 19% and over the past three years, the total loss to shareholders 97%

In the past three years, the share price of Shing Chi Holdings Limited (HKG:1741) 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. These are some of the concerns that shareholders may want to bring up at the next AGM held on 19th of March. 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.

Check out our latest analysis for Shing Chi Holdings

Comparing Shing Chi Holdings Limited's CEO Compensation With The Industry

Our data indicates that Shing Chi Holdings Limited has a market capitalization of HK$51m, and total annual CEO compensation was reported as HK$2.1m for the year to September 2024. That's a modest increase of 6.3% on the prior year. In particular, the salary of HK$1.85m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.2m. From this we gather that Chi Keung Lau is paid around the median for CEOs in the industry.

Component	2024	2023	Proportion (2024)
Salary	HK$1.8m	HK$1.8m	89%
Other	HK$225k	HK$150k	11%
Total Compensation	HK$2.1m	HK$2.0m	100%

Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. Our data reveals that Shing Chi Holdings allocates salary more or less in line with the wider market. 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 Shing Chi Holdings Limited's Growth Numbers

Shing Chi Holdings Limited has seen its earnings per share (EPS) increase by 19% a year over the past three years. In the last year, its revenue is down 19%.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Shing Chi Holdings Limited Been A Good Investment?

Few Shing Chi Holdings Limited shareholders would feel satisfied with the return of -97% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. 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. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 3 warning signs for Shing Chi Holdings that investors should be aware of in a dynamic business environment.

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.