It's Unlikely That Gain Plus Holdings Limited's (HKG:9900) CEO Will See A Huge Pay Rise This Year

Key Insights

• Gain Plus Holdings' Annual General Meeting to take place on 16th of August
• CEO Chiu Kwan Tsang's total compensation includes salary of HK$3.14m
• The overall pay is 710% above the industry average
• Gain Plus Holdings' EPS declined by 6.7% over the past three years while total shareholder return over the past three years was 2.0%

The anaemic share price growth at Gain Plus Holdings Limited (HKG:9900) over the past few years has probably not impressed shareholders and may be due to earnings not growing over that period. Some of these issues will occupy shareholders' minds as the AGM rolls around on 16th of August. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Gain Plus Holdings

How Does Total Compensation For Chiu Kwan Tsang Compare With Other Companies In The Industry?

According to our data, Gain Plus Holdings Limited has a market capitalization of HK$603m, and paid its CEO total annual compensation worth HK$18m over the year to March 2024. That's a notable increase of 59% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$3.1m.

For comparison, other companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.3m. Hence, we can conclude that Chiu Kwan Tsang is remunerated higher than the industry median. What's more, Chiu Kwan Tsang holds HK$169m 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$3.1m	HK$2.4m	17%
Other	HK$15m	HK$9.1m	83%
Total Compensation	HK$18m	HK$11m	100%

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. Gain Plus Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Gain Plus Holdings Limited's Growth Numbers

Gain Plus Holdings Limited has reduced its earnings per share by 6.7% a year over the last three years. In the last year, its revenue is down 4.9%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Gain Plus Holdings Limited Been A Good Investment?

With a total shareholder return of 2.0% over three years, Gain Plus Holdings Limited has done okay by shareholders, but there's always room for improvement. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

To Conclude...

While it's true that the share price growth hasn't been bad, it's hard to overlook the lack of earnings growth and this makes us question whether there will be any strong catalyst for the stock to improve. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Gain Plus Holdings (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.