Stock Analysis

We Think Sino-Ocean Service Holding Limited's (HKG:6677) CEO Compensation Package Needs To Be Put Under A Microscope

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Key Insights

  • Sino-Ocean Service Holding to hold its Annual General Meeting on 30th of May
  • Total pay for CEO Deyong Yang includes CN¥1.62m salary
  • Total compensation is 67% above industry average
  • Sino-Ocean Service Holding's three-year loss to shareholders was 88% while its EPS was down 50% over the past three years

The results at Sino-Ocean Service Holding Limited (HKG:6677) have been quite disappointing recently and CEO Deyong Yang bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 30th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Sino-Ocean Service Holding

Comparing Sino-Ocean Service Holding Limited's CEO Compensation With The Industry

Our data indicates that Sino-Ocean Service Holding Limited has a market capitalization of HK$675m, and total annual CEO compensation was reported as CN¥3.0m for the year to December 2023. That's a notable decrease of 11% on last year. We note that the salary of CN¥1.62m makes up a sizeable portion of the total compensation received by the CEO.

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 CN¥1.8m. This suggests that Deyong Yang is paid more than the median for the industry.

Component20232022Proportion (2023)
Salary CN¥1.6m CN¥1.6m 55%
Other CN¥1.3m CN¥1.7m 45%
Total CompensationCN¥3.0m CN¥3.3m100%

Speaking on an industry level, nearly 82% of total compensation represents salary, while the remainder of 18% is other remuneration. In Sino-Ocean Service Holding's case, non-salary compensation represents a greater slice of total remuneration, 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.

SEHK:6677 CEO Compensation May 23rd 2024

Sino-Ocean Service Holding Limited's Growth

Over the last three years, Sino-Ocean Service Holding Limited has shrunk its earnings per share by 50% per year. Its revenue is down 5.9% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Sino-Ocean Service Holding Limited Been A Good Investment?

The return of -88% over three years would not have pleased Sino-Ocean Service Holding Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for Sino-Ocean Service Holding that investors should be aware of in a dynamic business environment.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Sino-Ocean Service Holding is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.