This Is The Reason Why We Think Hong Kong ChaoShang Group Limited's (HKG:2322) CEO Deserves A Bump Up To Their Compensation

The solid performance at Hong Kong ChaoShang Group Limited (HKG:2322) has been impressive and shareholders will probably be pleased to know that CEO Chi Yuen Chan has delivered. At the upcoming AGM on 31 August 2021, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

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$4.0b, and paid its CEO total annual compensation worth HK$3.6m over the year to March 2021. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at HK$3.58m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from HK$1.6b to HK$6.2b, the reported median CEO total compensation was HK$5.6m. That is to say, Chi Yuen Chan is paid under the industry median.

Component	2021	2020	Proportion (2021)
Salary	HK$3.6m	HK$3.6m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$3.6m	HK$3.6m	100%

On an industry level, around 85% of total compensation represents salary and 15% is other remuneration. Hong Kong ChaoShang Group has gone down a largely traditional route, paying Chi Yuen Chan a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Hong Kong ChaoShang Group Limited's Growth

Hong Kong ChaoShang Group Limited has seen its earnings per share (EPS) increase by 25% a year over the past three years. Its revenue is up 42% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Hong Kong ChaoShang Group Limited Been A Good Investment?

We think that the total shareholder return of 66%, over three years, would leave most Hong Kong ChaoShang Group Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Hong Kong ChaoShang Group pays its CEO a majority of compensation through a salary. Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Hong Kong ChaoShang Group.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.
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