Should Shareholders Have Second Thoughts About A Pay Rise For Universe Printshop Holdings Limited's (HKG:8448) CEO This Year?

Performance at Universe Printshop Holdings Limited (HKG:8448) has not been particularly rosy recently and shareholders will likely be holding CEO Ching Loi Hsu and the board accountable for this. At the upcoming AGM on 09 August 2021, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

Check out our latest analysis for Universe Printshop Holdings

Comparing Universe Printshop Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that Universe Printshop Holdings Limited has a market capitalization of HK$26m, and reported total annual CEO compensation of HK$903k for the year to March 2021. That's slightly lower by 5.7% over the previous year. We note that the salary portion, which stands at HK$885.0k constitutes the majority of total compensation received by 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, Universe Printshop Holdings pays its CEO under the industry median. Moreover, Ching Loi Hsu also holds HK$3.2m worth of Universe Printshop Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	HK$885k	HK$890k	98%
Other	HK$18k	HK$68k	2%
Total Compensation	HK$903k	HK$958k	100%

On an industry level, roughly 90% of total compensation represents salary and 10% is other remuneration. Universe Printshop Holdings has gone down a largely traditional route, paying Ching Loi Hsu a high salary, giving it preference over non-salary benefits. 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 Universe Printshop Holdings Limited's Growth Numbers

Over the last three years, Universe Printshop Holdings Limited has shrunk its earnings per share by 25% per year. In the last year, its revenue is down 23%.

Few shareholders would be pleased to read that EPS have declined. 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 Universe Printshop Holdings Limited Been A Good Investment?

With a total shareholder return of -72% over three years, Universe Printshop Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Universe Printshop Holdings pays its CEO a majority of compensation through a salary. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. 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.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Universe Printshop Holdings 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.

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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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