Shareholders May Be A Bit More Conservative With Roma (meta) Group Limited's (HKG:8072) CEO Compensation For Now

Key Insights

• Roma (meta) Group to hold its Annual General Meeting on 27th of September
• CEO Ken Yue's total compensation includes salary of HK$2.19m
• Total compensation is similar to the industry average
• Roma (meta) Group's three-year loss to shareholders was 79% while its EPS grew by 112% over the past three years

The underwhelming share price performance of Roma (meta) Group Limited (HKG:8072) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 27th of September. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Roma (meta) Group

Comparing Roma (meta) Group Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Roma (meta) Group Limited has a market capitalization of HK$38m, and reported total annual CEO compensation of HK$2.2m for the year to March 2023. That's slightly lower by 7.5% over the previous year. In particular, the salary of HK$2.19m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Professional Services industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.2m. From this we gather that Ken Yue is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	HK$2.2m	HK$2.4m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$2.2m	HK$2.4m	100%

Speaking on an industry level, nearly 80% of total compensation represents salary, while the remainder of 20% is other remuneration. Roma (meta) Group has gone down a largely traditional route, paying Ken Yue a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Roma (meta) Group Limited's Growth

Roma (meta) Group Limited has seen its earnings per share (EPS) increase by 112% a year over the past three years. It saw its revenue drop 24% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Roma (meta) Group Limited Been A Good Investment?

With a total shareholder return of -79% over three years, Roma (meta) Group Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Ken receives almost all of their compensation through a salary. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Roma (meta) Group (2 are a bit concerning!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.