Here's Why We Think M&L Holdings Group Limited's (HKG:8152) CEO Compensation Looks Fair

Key Insights

• M&L Holdings Group's Annual General Meeting to take place on 30th of May
• Salary of HK$975.0k is part of CEO Lai Ming Ng's total remuneration
• Total compensation is 53% below industry average
• M&L Holdings Group's three-year loss to shareholders was 26% while its EPS grew by 43% over the past three years

Performance at M&L Holdings Group Limited (HKG:8152) has been rather uninspiring recently and shareholders may be wondering how CEO Lai Ming Ng plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 30th of May. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We think CEO compensation looks appropriate given the data we have put together.

See our latest analysis for M&L Holdings Group

Comparing M&L Holdings Group Limited's CEO Compensation With The Industry

Our data indicates that M&L Holdings Group Limited has a market capitalization of HK$37m, and total annual CEO compensation was reported as HK$993k for the year to December 2023. There was no change in the compensation compared to last year. We note that the salary portion, which stands at HK$975.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Trade Distributors industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.1m. Accordingly, M&L Holdings Group pays its CEO under the industry median. Moreover, Lai Ming Ng also holds HK$22m worth of M&L Holdings Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 94% of total compensation out of all the companies we analyzed, while other remuneration made up 6% of the pie. M&L Holdings Group pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

M&L Holdings Group Limited's Growth

M&L Holdings Group Limited has seen its earnings per share (EPS) increase by 43% a year over the past three years. In the last year, its revenue is up 77%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 M&L Holdings Group Limited Been A Good Investment?

Given the total shareholder loss of 26% over three years, many shareholders in M&L Holdings Group Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Lai Ming receives almost all of their compensation through a salary. The fact that shareholders are sitting on a loss is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for M&L Holdings Group that investors should be aware of in a dynamic business environment.

Important note: M&L Holdings Group 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.