Shareholders May Be Wary Of Increasing WAC Holdings Limited's (HKG:8619) CEO Compensation Package

Key Insights

• WAC Holdings' Annual General Meeting to take place on 29th of September
• Salary of HK$2.16m is part of CEO Po Lam Kwong's total remuneration
• The total compensation is 80% higher than the average for the industry
• Over the past three years, WAC Holdings' EPS fell by 12% and over the past three years, the total loss to shareholders 95%

The results at WAC Holdings Limited (HKG:8619) have been quite disappointing recently and CEO Po Lam Kwong 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 29th of September. 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. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for WAC Holdings

How Does Total Compensation For Po Lam Kwong Compare With Other Companies In The Industry?

Our data indicates that WAC Holdings Limited has a market capitalization of HK$46m, and total annual CEO compensation was reported as HK$4.1m for the year to March 2023. We note that's an increase of 36% above last year. In particular, the salary of HK$2.16m, makes up a fairly large portion of the total compensation being paid to 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$2.2m. Accordingly, our analysis reveals that WAC Holdings Limited pays Po Lam Kwong north of 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, around 80% of total compensation represents salary and 20% is other remuneration. WAC Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at WAC Holdings Limited's Growth Numbers

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.

Overall this is not a very positive result for shareholders. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 WAC Holdings Limited Been A Good Investment?

Few WAC Holdings Limited shareholders would feel satisfied with the return of -95% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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 2 warning signs for WAC 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. 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.