Increases to CEO Compensation Might Be Put On Hold For Now at Asia Allied Infrastructure Holdings Limited (HKG:711)

Key Insights

• Asia Allied Infrastructure Holdings' Annual General Meeting to take place on 16th of August
• Salary of HK$6.70m is part of CEO Derrick Pang's total remuneration
• Total compensation is 208% above industry average
• Over the past three years, Asia Allied Infrastructure Holdings' EPS grew by 85% and over the past three years, the total loss to shareholders 18%

The underwhelming share price performance of Asia Allied Infrastructure Holdings Limited (HKG:711) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 16th of August. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Asia Allied Infrastructure Holdings

How Does Total Compensation For Derrick Pang Compare With Other Companies In The Industry?

Our data indicates that Asia Allied Infrastructure Holdings Limited has a market capitalization of HK$794m, and total annual CEO compensation was reported as HK$6.9m for the year to March 2024. We note that's a decrease of 18% compared to last year. We note that the salary portion, which stands at HK$6.70m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Construction industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.3m. Accordingly, our analysis reveals that Asia Allied Infrastructure Holdings Limited pays Derrick Pang north of the industry median. Furthermore, Derrick Pang directly owns HK$3.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. Asia Allied Infrastructure Holdings has gone down a largely traditional route, paying Derrick Pang 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.

Asia Allied Infrastructure Holdings Limited's Growth

Over the past three years, Asia Allied Infrastructure Holdings Limited has seen its earnings per share (EPS) grow by 85% per year. It achieved revenue growth of 7.4% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Asia Allied Infrastructure Holdings Limited Been A Good Investment?

With a three year total loss of 18% for the shareholders, Asia Allied Infrastructure Holdings Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Derrick receives almost all of their compensation through a salary. 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 probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 1 which makes us a bit uncomfortable) in Asia Allied Infrastructure Holdings we think you should know about.

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.