Shareholders Will Probably Hold Off On Increasing Beng Soon Machinery Holdings Limited's (HKG:1987) CEO Compensation For The Time Being

Key Insights

• Beng Soon Machinery Holdings to hold its Annual General Meeting on 30th of May
• CEO Chee Beng Tan's total compensation includes salary of S$427.0k
• The overall pay is 231% above the industry average
• Beng Soon Machinery Holdings' three-year loss to shareholders was 63% while its EPS grew by 23% over the past three years

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In the past three years, the share price of Beng Soon Machinery Holdings Limited (HKG:1987) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 30th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. 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 Beng Soon Machinery Holdings

How Does Total Compensation For Chee Beng Tan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Beng Soon Machinery Holdings Limited has a market capitalization of HK$149m, and reported total annual CEO compensation of S$1.2m for the year to December 2024. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at S$427k.

For comparison, other companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of S$353k. Accordingly, our analysis reveals that Beng Soon Machinery Holdings Limited pays Chee Beng Tan north of the industry median. Furthermore, Chee Beng Tan directly owns HK$51m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	S$427k	S$434k	37%
Other	S$739k	S$739k	63%
Total Compensation	S$1.2m	S$1.2m	100%

On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. Beng Soon Machinery Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Beng Soon Machinery Holdings Limited's Growth Numbers

Beng Soon Machinery Holdings Limited has seen its earnings per share (EPS) increase by 23% a year over the past three years. In the last year, its revenue is up 14%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Beng Soon Machinery Holdings Limited Been A Good Investment?

Few Beng Soon Machinery Holdings Limited shareholders would feel satisfied with the return of -63% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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. That's why we did some digging and identified 2 warning signs for Beng Soon Machinery Holdings that you should be aware of before investing.

Important note: Beng Soon Machinery 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.