Wai Hung Group Holdings Limited's (HKG:3321) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• Wai Hung Group Holdings' Annual General Meeting to take place on 31st of May
• Salary of MO$505.0k is part of CEO Kam Hung Li's total remuneration
• The overall pay is 74% below the industry average
• Wai Hung Group Holdings' EPS declined by 16% over the past three years while total shareholder loss over the past three years was 98%

Shareholders may be wondering what CEO Kam Hung Li plans to do to improve the less than great performance at Wai Hung Group Holdings Limited (HKG:3321) recently. At the next AGM coming up on 31st of May, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for Wai Hung Group Holdings

How Does Total Compensation For Kam Hung Li Compare With Other Companies In The Industry?

At the time of writing, our data shows that Wai Hung Group Holdings Limited has a market capitalization of HK$36m, and reported total annual CEO compensation of MO$505k for the year to December 2023. That's a slight decrease of 5.8% on the prior year. Notably, the salary of MO$505k is the entirety of the CEO compensation.

On comparing similar-sized companies in the Hong Kong Commercial Services industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was MO$2.0m. That is to say, Kam Hung Li is paid under the industry median. Moreover, Kam Hung Li also holds HK$15m worth of Wai Hung Group Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	MO$505k	MO$536k	100%
Other	-	-	-
Total Compensation	MO$505k	MO$536k	100%

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. Speaking on a company level, Wai Hung Group Holdings prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Wai Hung Group Holdings Limited's Growth Numbers

Wai Hung Group Holdings Limited has reduced its earnings per share by 16% a year over the last three years. Its revenue is up 94% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Wai Hung Group Holdings Limited Been A Good Investment?

With a total shareholder return of -98% over three years, Wai Hung Group Holdings Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Wai Hung Group Holdings pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The fact that shareholders have earned a negative share price return is certainly disconcerting. The downward trend in share price performance may be attributable to the the fact that earnings growth has gone backwards. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 5 warning signs for Wai Hung Group Holdings (of which 4 are a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Wai Hung Group 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.