Here's Why It's Unlikely That WAC Holdings Limited's (HKG:8619) CEO Will See A Pay Rise This Year

Key Insights

• WAC Holdings will host its Annual General Meeting on 27th of October
• CEO Po Lam Kwong's total compensation includes salary of HK$2.16m
• The overall pay is 83% above the industry average
• Over the past three years, WAC Holdings' EPS fell by 12% and over the past three years, the total loss to shareholders 93%

Shareholders will probably not be too impressed with the underwhelming results at WAC Holdings Limited (HKG:8619) recently. At the upcoming AGM on 27th of October, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for WAC Holdings

Comparing WAC Holdings Limited's CEO Compensation With The Industry

According to our data, WAC Holdings Limited has a market capitalization of HK$63m, and paid its CEO total annual compensation worth HK$4.1m over the year to March 2023. We note that's an increase of 36% above last year. Notably, the salary which is HK$2.16m, represents a considerable chunk of the total compensation being paid.

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$2.2m. Hence, we can conclude that Po Lam Kwong is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	HK$2.2m	HK$2.0m	53%
Other	HK$1.9m	HK$932k	47%
Total Compensation	HK$4.1m	HK$3.0m	100%

On an industry level, roughly 82% of total compensation represents salary and 18% is other remuneration. WAC Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

WAC Holdings Limited's Growth

Over the last three years, WAC Holdings Limited has shrunk its earnings per share by 12% per year. Its revenue is up 12% over the last year.

The decline in EPS is a bit concerning. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has WAC Holdings Limited Been A Good Investment?

The return of -93% over three years would not have pleased WAC Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 WAC Holdings that you should be aware of before investing.

Switching gears from WAC 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.