We Think The Compensation For Noble Engineering Group Holdings Limited's (HKG:8445) CEO Looks About Right

Key Insights

• Noble Engineering Group Holdings' Annual General Meeting to take place on 30th of September
• CEO CK Tse's total compensation includes salary of HK$600.0k
• The total compensation is 74% less than the average for the industry
• Noble Engineering Group Holdings' EPS grew by 17% over the past three years while total shareholder loss over the past three years was 46%

Performance at Noble Engineering Group Holdings Limited (HKG:8445) has been rather uninspiring recently and shareholders may be wondering how CEO CK Tse 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 September. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for Noble Engineering Group Holdings

How Does Total Compensation For CK Tse Compare With Other Companies In The Industry?

According to our data, Noble Engineering Group Holdings Limited has a market capitalization of HK$54m, and paid its CEO total annual compensation worth HK$600k over the year to March 2024. This was the same as last year. Notably, the salary of HK$600k is the entirety of the CEO compensation.

On comparing similar-sized companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.3m. That is to say, CK Tse is paid under the industry median.

Component	2024	2023	Proportion (2024)
Salary	HK$600k	HK$600k	100%
Other	-	-	-
Total Compensation	HK$600k	HK$600k	100%

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. On a company level, Noble Engineering Group Holdings prefers to reward its CEO through a salary, opting not to pay CK Tse through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Noble Engineering Group Holdings Limited's Growth

Noble Engineering Group Holdings Limited's earnings per share (EPS) grew 17% per year over the last three years. It achieved revenue growth of 35% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Noble Engineering Group Holdings Limited Been A Good Investment?

With a total shareholder return of -46% over three years, Noble Engineering Group Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Noble Engineering Group Holdings pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The fact that shareholders are sitting on a loss is certainly disheartening. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key focus for the board and management will be how to align the share price with fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Noble Engineering Group Holdings that you should be aware of before investing.

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.