Should Shareholders Reconsider Matrix Holdings Limited's (HKG:1005) CEO Compensation Package?

Key Insights

• Matrix Holdings will host its Annual General Meeting on 8th of August
• Total pay for CEO Hiu Har Yip includes HK$3.25m salary
• The overall pay is 88% above the industry average
• Matrix Holdings' EPS declined by 87% over the past three years while total shareholder loss over the past three years was 46%

The results at Matrix Holdings Limited (HKG:1005) have been quite disappointing recently and CEO Hiu Har Yip 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 8th of August. 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 Matrix Holdings

How Does Total Compensation For Hiu Har Yip Compare With Other Companies In The Industry?

According to our data, Matrix Holdings Limited has a market capitalization of HK$983m, and paid its CEO total annual compensation worth HK$3.3m over the year to December 2023. There was no change in the compensation compared to last year. We note that the salary portion, which stands at HK$3.25m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Hong Kong Leisure industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.7m. Accordingly, our analysis reveals that Matrix Holdings Limited pays Hiu Har Yip north of the industry median. Furthermore, Hiu Har Yip directly owns HK$455k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	HK$3.3m	HK$3.3m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$3.3m	HK$3.3m	100%

On an industry level, roughly 92% of total compensation represents salary and 8% is other remuneration. Matrix Holdings has gone down a largely traditional route, paying Hiu Har Yip 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.

Matrix Holdings Limited's Growth

Matrix Holdings Limited has reduced its earnings per share by 87% a year over the last three years. It saw its revenue drop 28% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. 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 Matrix Holdings Limited Been A Good Investment?

Few Matrix Holdings Limited shareholders would feel satisfied with the return of -46% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Hiu Har receives almost all of their 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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Matrix Holdings that investors should think about before committing capital to this stock.

Important note: Matrix Holdings 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com