Shareholders May Find It Hard To Justify Increasing Roma (meta) Group Limited's (HKG:8072) CEO Compensation For Now

Key Insights

• Roma (meta) Group will host its Annual General Meeting on 26th of September
• Total pay for CEO Ken Yue includes HK$1.59m salary
• The total compensation is similar to the average for the industry
• Over the past three years, Roma (meta) Group's EPS grew by 70% and over the past three years, the total loss to shareholders 94%

The underwhelming share price performance of Roma (meta) Group Limited (HKG:8072) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 26th of September. They could also influence management through voting on resolutions such as executive remuneration. 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

How Does Total Compensation For Ken Yue Compare With Other Companies In The Industry?

According to our data, Roma (meta) Group Limited has a market capitalization of HK$10m, and paid its CEO total annual compensation worth HK$1.6m over the year to March 2024. We note that's a decrease of 27% compared to last year. We note that the salary portion, which stands at HK$1.59m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Professional Services industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.6m. This suggests that Roma (meta) Group remunerates its CEO largely in line with the industry average.

Component	2024	2023	Proportion (2024)
Salary	HK$1.6m	HK$2.2m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$1.6m	HK$2.2m	100%

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. Roma (meta) Group pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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

Over the past three years, Roma (meta) Group Limited has seen its earnings per share (EPS) grow by 70% per year. Its revenue is down 6.4% over the previous 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. 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 Roma (meta) Group Limited Been A Good Investment?

The return of -94% over three years would not have pleased Roma (meta) Group Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Roma (meta) Group pays its CEO a majority of compensation through a salary. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

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 2 warning signs for Roma (meta) Group that you should be aware of before investing.

Important note: Roma (meta) Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.