Hong Kong ChaoShang Group Limited's (HKG:2322) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Hong Kong ChaoShang Group will host its Annual General Meeting on 28th of September
• Salary of HK$3.28m is part of CEO Chi Yuen Chan's total remuneration
• The total compensation is 33% higher than the average for the industry
• Hong Kong ChaoShang Group's three-year loss to shareholders was 14% while its EPS was down 15% over the past three years

In the past three years, shareholders of Hong Kong ChaoShang Group Limited (HKG:2322) have seen a loss on their investment. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. Shareholders will have a chance to take their concerns to the board at the next AGM on 28th of September and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

See our latest analysis for Hong Kong ChaoShang Group

Comparing Hong Kong ChaoShang Group Limited's CEO Compensation With The Industry

According to our data, Hong Kong ChaoShang Group Limited has a market capitalization of HK$3.3b, and paid its CEO total annual compensation worth HK$3.3m over the year to March 2023. There was no change in the compensation compared to last year. In particular, the salary of HK$3.28m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Trade Distributors industry with market capitalizations ranging from HK$1.6b to HK$6.3b, the reported median CEO total compensation was HK$2.5m. Hence, we can conclude that Chi Yuen Chan is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	HK$3.3m	HK$3.3m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$3.3m	HK$3.3m	100%

On an industry level, around 93% of total compensation represents salary and 7% is other remuneration. Hong Kong ChaoShang Group is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. 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 Hong Kong ChaoShang Group Limited's Growth Numbers

Over the last three years, Hong Kong ChaoShang Group Limited has shrunk its earnings per share by 15% per year. In the last year, its revenue is up 17%.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Hong Kong ChaoShang Group Limited Been A Good Investment?

Since shareholders would have lost about 14% over three years, some Hong Kong ChaoShang Group Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Chi Yuen receives almost all of their compensation through a salary. The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. Shareholders will get the chance at the upcoming AGM 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 one thing, but it is also interesting to check if the CEO is buying or selling Hong Kong ChaoShang Group (free visualization of insider trades).

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.