Shareholders May Not Be So Generous With Man Shun Group (Holdings) Limited's (HKG:1746) CEO Compensation And Here's Why

Key Insights

• Man Shun Group (Holdings) to hold its Annual General Meeting on 6th of June
• Total pay for CEO Gary Cheung includes HK$1.80m salary
• The overall pay is comparable to the industry average
• Over the past three years, Man Shun Group (Holdings)'s EPS grew by 109% and over the past three years, the total loss to shareholders 81%

The underwhelming share price performance of Man Shun Group (Holdings) Limited (HKG:1746) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 6th of June. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Man Shun Group (Holdings)

How Does Total Compensation For Gary Cheung Compare With Other Companies In The Industry?

Our data indicates that Man Shun Group (Holdings) Limited has a market capitalization of HK$135m, and total annual CEO compensation was reported as HK$2.0m for the year to December 2023. This was the same amount the CEO received in the prior year. Notably, the salary which is HK$1.80m, 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$2.2m. So it looks like Man Shun Group (Holdings) compensates Gary Cheung in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	HK$1.8m	HK$1.8m	91%
Other	HK$168k	HK$168k	9%
Total Compensation	HK$2.0m	HK$2.0m	100%

On an industry level, roughly 83% of total compensation represents salary and 17% is other remuneration. According to our research, Man Shun Group (Holdings) has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Man Shun Group (Holdings) Limited's Growth

Over the past three years, Man Shun Group (Holdings) Limited has seen its earnings per share (EPS) grow by 109% per year. It achieved revenue growth of 22% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Man Shun Group (Holdings) Limited Been A Good Investment?

The return of -81% over three years would not have pleased Man Shun Group (Holdings) Limited shareholders. 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 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. 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.

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 Man Shun Group (Holdings) you should be aware of, and 1 of them is a bit concerning.

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.