A.Plus Group Holdings Limited's (HKG:1841) CEO Compensation Is Looking A Bit Stretched At The Moment

Despite positive share price growth of 14% for A.Plus Group Holdings Limited (HKG:1841) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 20 August 2021. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. 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 A.Plus Group Holdings

How Does Total Compensation For Wing Kong Fong Compare With Other Companies In The Industry?

At the time of writing, our data shows that A.Plus Group Holdings Limited has a market capitalization of HK$248m, and reported total annual CEO compensation of HK$2.3m for the year to March 2021. We note that's a small decrease of 5.5% on last year. We note that the salary portion, which stands at HK$1.44m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.6m. Hence, we can conclude that Wing Kong Fong is remunerated higher than the industry median. What's more, Wing Kong Fong holds HK$72m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	HK$1.4m	HK$1.4m	63%
Other	HK$864k	HK$999k	38%
Total Compensation	HK$2.3m	HK$2.4m	100%

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. A.Plus Group Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. 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.Plus Group Holdings Limited's Growth

Over the last three years, A.Plus Group Holdings Limited has shrunk its earnings per share by 12% per year. In the last year, its revenue is down 8.3%.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 A.Plus Group Holdings Limited Been A Good Investment?

With a total shareholder return of 14% over three years, A.Plus Group Holdings Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

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 3 warning signs for A.Plus Group Holdings that you should be aware of before investing.

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.
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