It's Unlikely That The CEO Of CMON Limited (HKG:1792) Will See A Huge Pay Rise This Year

Key Insights

• CMON's Annual General Meeting to take place on 28th of May
• Total pay for CEO Chern Ann Ng includes US$240.7k salary
• The overall pay is comparable to the industry average
• CMON's EPS grew by 120% over the past three years while total shareholder loss over the past three years was 31%

Shareholders of CMON Limited (HKG:1792) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 28th of May. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for CMON

Comparing CMON Limited's CEO Compensation With The Industry

According to our data, CMON Limited has a market capitalization of HK$89m, and paid its CEO total annual compensation worth US$250k over the year to December 2023. That's a notable decrease of 35% on last year. Notably, the salary which is US$240.7k, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Leisure industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of US$229k. So it looks like CMON compensates Chern Ann Ng in line with the median for the industry. Furthermore, Chern Ann Ng directly owns HK$18m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$241k	US$377k	96%
Other	US$8.9k	US$9.1k	4%
Total Compensation	US$250k	US$386k	100%

Talking in terms of the industry, salary represented approximately 92% of total compensation out of all the companies we analyzed, while other remuneration made up 8% of the pie. CMON 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.

CMON Limited's Growth

Over the past three years, CMON Limited has seen its earnings per share (EPS) grow by 120% per year. In the last year, its revenue changed by just 0.6%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has CMON Limited Been A Good Investment?

The return of -31% over three years would not have pleased CMON Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Chern Ann receives almost all of their compensation through a salary. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. 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.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 4 warning signs for CMON (1 can't be ignored!) that you should be aware of before investing here.

Switching gears from CMON, 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.