Here's Why It's Unlikely That Regina Miracle International (Holdings) Limited's (HKG:2199) CEO Will See A Pay Rise This Year

The results at Regina Miracle International (Holdings) Limited (HKG:2199) have been quite disappointing recently and CEO YY Hung bears some responsibility for this. At the upcoming AGM on 13 September 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Regina Miracle International (Holdings)

How Does Total Compensation For YY Hung Compare With Other Companies In The Industry?

According to our data, Regina Miracle International (Holdings) Limited has a market capitalization of HK$3.5b, and paid its CEO total annual compensation worth HK$8.3m over the year to March 2021. That's a notable decrease of 9.2% on last year. Notably, the salary which is HK$8.26m, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from HK$1.6b to HK$6.2b, we found that the median CEO total compensation was HK$4.8m. Hence, we can conclude that YY Hung is remunerated higher than the industry median. Furthermore, YY Hung directly owns HK$2.6b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	HK$8.3m	HK$9.1m	99%
Other	HK$54k	HK$54k	1%
Total Compensation	HK$8.3m	HK$9.2m	100%

On an industry level, roughly 91% of total compensation represents salary and 9% is other remuneration. Regina Miracle International (Holdings) is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to 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 Regina Miracle International (Holdings) Limited's Growth Numbers

Over the last three years, Regina Miracle International (Holdings) Limited has shrunk its earnings per share by 19% per year. It saw its revenue drop 5.8% over the last year.

Overall this is not a very positive result for shareholders. 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Regina Miracle International (Holdings) Limited Been A Good Investment?

The return of -48% over three years would not have pleased Regina Miracle International (Holdings) Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Regina Miracle International (Holdings) pays its CEO a majority of compensation through a salary. 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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Regina Miracle International (Holdings) (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

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.
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