Shareholders Will Probably Be Cautious Of Increasing Vistar Holdings Limited's (HKG:8535) CEO Compensation At The Moment

Key Insights

• Vistar Holdings will host its Annual General Meeting on 14th of August
• Total pay for CEO Keung Poon includes HK$1.29m salary
• The total compensation is 43% less than the average for the industry
• Vistar Holdings' EPS declined by 44% over the past three years while total shareholder loss over the past three years was 91%

The underwhelming performance at Vistar Holdings Limited (HKG:8535) recently has probably not pleased shareholders. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 14th of August. From our analysis below, we think CEO compensation looks appropriate for now.

See our latest analysis for Vistar Holdings

Comparing Vistar Holdings Limited's CEO Compensation With The Industry

According to our data, Vistar Holdings Limited has a market capitalization of HK$42m, and paid its CEO total annual compensation worth HK$1.3m over the year to March 2024. We note that's a small decrease of 5.3% on last year. Notably, the salary of HK$1.3m is the entirety of the CEO compensation.

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. In other words, Vistar Holdings pays its CEO lower than the industry median. What's more, Keung Poon holds HK$15m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	HK$1.3m	HK$1.4m	100%
Other	-	HK$15k	-
Total Compensation	HK$1.3m	HK$1.4m	100%

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. On a company level, Vistar Holdings prefers to reward its CEO through a salary, opting not to pay Keung Poon through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Vistar Holdings Limited's Growth

Vistar Holdings Limited has reduced its earnings per share by 44% a year over the last three years. Its revenue is up 9.2% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Vistar Holdings Limited Been A Good Investment?

With a total shareholder return of -91% over three years, Vistar Holdings Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Vistar Holdings pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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 Vistar Holdings that you should be aware of before investing.

Switching gears from Vistar Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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