Vicon Holdings Limited's (HKG:3878) CEO Might Not Expect Shareholders To Be So Generous This Year

Shareholders will probably not be too impressed with the underwhelming results at Vicon Holdings Limited (HKG:3878) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 16 September 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Vicon Holdings

How Does Total Compensation For Hing Kuen Tsang Compare With Other Companies In The Industry?

According to our data, Vicon Holdings Limited has a market capitalization of HK$307m, and paid its CEO total annual compensation worth HK$3.2m over the year to March 2021. That's a notable decrease of 16% on last year. Notably, the salary which is HK$3.18m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.8m. Hence, we can conclude that Hing Kuen Tsang is remunerated higher than the industry median.

Component	2021	2020	Proportion (2021)
Salary	HK$3.2m	HK$3.8m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$3.2m	HK$3.8m	100%

On an industry level, around 87% of total compensation represents salary and 13% is other remuneration. Vicon Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Vicon Holdings Limited's Growth Numbers

Over the last three years, Vicon Holdings Limited has shrunk its earnings per share by 57% per year. It saw its revenue drop 46% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Vicon Holdings Limited Been A Good Investment?

Few Vicon Holdings Limited shareholders would feel satisfied with the return of -71% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Hing Kuen receives almost all of their compensation through a salary. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 5 warning signs for Vicon Holdings (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

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.
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