Here's Why Shareholders Should Examine World Houseware (Holdings) Limited's (HKG:713) CEO Compensation Package More Closely

Key Insights

• World Houseware (Holdings) to hold its Annual General Meeting on 13th of June
• Salary of HK$2.86m is part of CEO Mei Po Fung's total remuneration
• The overall pay is 82% above the industry average
• Over the past three years, World Houseware (Holdings)'s EPS fell by 99% and over the past three years, the total loss to shareholders 46%

World Houseware (Holdings) Limited (HKG:713) has not performed well recently and CEO Mei Po Fung will probably need to up their game. At the upcoming AGM on 13th of June, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for World Houseware (Holdings)

How Does Total Compensation For Mei Po Fung Compare With Other Companies In The Industry?

According to our data, World Houseware (Holdings) Limited has a market capitalization of HK$388m, and paid its CEO total annual compensation worth HK$2.9m over the year to December 2023. Notably, that's a decrease of 10.0% over the year before. Notably, the salary of HK$2.9m is the entirety of the CEO compensation.

In comparison with other companies in the Hong Kong Building industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.6m. This suggests that Mei Po Fung is paid more than the median for the industry. What's more, Mei Po Fung holds HK$25m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	HK$2.9m	HK$3.2m	100%
Other	-	-	-
Total Compensation	HK$2.9m	HK$3.2m	100%

Speaking on an industry level, nearly 73% of total compensation represents salary, while the remainder of 27% is other remuneration. On a company level, World Houseware (Holdings) prefers to reward its CEO through a salary, opting not to pay Mei Po Fung through 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 World Houseware (Holdings) Limited's Growth Numbers

Over the last three years, World Houseware (Holdings) Limited has shrunk its earnings per share by 99% per year. It saw its revenue drop 39% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 World Houseware (Holdings) Limited Been A Good Investment?

The return of -46% over three years would not have pleased World Houseware (Holdings) Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

World Houseware (Holdings) pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 2 warning signs (and 1 which is a bit unpleasant) in World Houseware (Holdings) we think you should know about.

Important note: World Houseware (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.