Here's Why It's Unlikely That eprint Group Limited's (HKG:1884) CEO Will See A Pay Rise This Year

The results at eprint Group Limited (HKG:1884) have been quite disappointing recently and CEO William She bears some responsibility for this. At the upcoming AGM on 13 August 2021, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for eprint Group

How Does Total Compensation For William She Compare With Other Companies In The Industry?

According to our data, eprint Group Limited has a market capitalization of HK$157m, and paid its CEO total annual compensation worth HK$3.8m over the year to March 2021. That's a notable decrease of 13% on last year. In particular, the salary of HK$2.82m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.6m. Accordingly, our analysis reveals that eprint Group Limited pays William She north of the industry median. Furthermore, William She directly owns HK$451k worth of shares in the company.

Component	2021	2020	Proportion (2021)
Salary	HK$2.8m	HK$2.8m	74%
Other	HK$1.0m	HK$1.6m	26%
Total Compensation	HK$3.8m	HK$4.4m	100%

On an industry level, around 90% of total compensation represents salary and 10% is other remuneration. It's interesting to note that eprint Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at eprint Group Limited's Growth Numbers

eprint Group Limited has reduced its earnings per share by 4.8% a year over the last three years. In the last year, its revenue is down 27%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 eprint Group Limited Been A Good Investment?

With a total shareholder return of -48% over three years, eprint Group Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for eprint Group you should be aware of, and 1 of them shouldn't be ignored.

Switching gears from eprint Group, 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. 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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