Most Shareholders Will Probably Find That The Compensation For Grand Talents Group Holdings Limited's (HKG:8516) CEO Is Reasonable

Key Insights

• Grand Talents Group Holdings will host its Annual General Meeting on 30th of July
• CEO Chu Shing Ip's total compensation includes salary of HK$720.0k
• Total compensation is 67% below industry average
• Grand Talents Group Holdings' EPS grew by 49% over the past three years while total shareholder loss over the past three years was 89%

The performance at Grand Talents Group Holdings Limited (HKG:8516) has been rather lacklustre of late and shareholders may be wondering what CEO Chu Shing Ip is planning to do about this. At the next AGM coming up on 30th of July, they can influence managerial decision making through voting on resolutions, including executive remuneration. 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 have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for Grand Talents Group Holdings

Comparing Grand Talents Group Holdings Limited's CEO Compensation With The Industry

Our data indicates that Grand Talents Group Holdings Limited has a market capitalization of HK$18m, and total annual CEO compensation was reported as HK$738k for the year to March 2024. There was no change in the compensation compared to last year. In particular, the salary of HK$720.0k, makes up a huge portion of the total compensation being paid to 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$2.2m. This suggests that Chu Shing Ip is paid below the industry median.

Component	2024	2023	Proportion (2024)
Salary	HK$720k	HK$720k	98%
Other	HK$18k	HK$18k	2%
Total Compensation	HK$738k	HK$738k	100%

On an industry level, around 84% of total compensation represents salary and 16% is other remuneration. Investors will find it interesting that Grand Talents Group Holdings pays the bulk of its rewards through a traditional salary, instead of 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 Grand Talents Group Holdings Limited's Growth Numbers

Grand Talents Group Holdings Limited has seen its earnings per share (EPS) increase by 49% a year over the past three years. It saw its revenue drop 42% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Grand Talents Group Holdings Limited Been A Good Investment?

With a total shareholder return of -89% over three years, Grand Talents Group Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Chu Shing receives almost all of their compensation through a salary. The fact that shareholders have earned a negative share price return is certainly disconcerting. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 6 warning signs (and 3 which can't be ignored) in Grand Talents Group Holdings we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com