Here's Why Yangtzekiang Garment Limited's (HKG:294) CEO May Not Expect A Pay Rise This Year

Key Insights

• Yangtzekiang Garment to hold its Annual General Meeting on 27th of September
• CEO Suk Man Chan's total compensation includes salary of HK$815.0k
• Total compensation is 55% below industry average
• Yangtzekiang Garment's three-year loss to shareholders was 46% while its EPS was down 64% over the past three years

The disappointing performance at Yangtzekiang Garment Limited (HKG:294) will make some shareholders rather disheartened. At the upcoming AGM on 27th of September, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.

See our latest analysis for Yangtzekiang Garment

Comparing Yangtzekiang Garment Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Yangtzekiang Garment Limited has a market capitalization of HK$217m, and reported total annual CEO compensation of HK$855k for the year to March 2024. This was the same amount the CEO received in the prior year. We note that the salary portion, which stands at HK$815.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Luxury industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.9m. That is to say, Suk Man Chan is paid under the industry median. What's more, Suk Man Chan holds HK$4.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	HK$815k	HK$815k	95%
Other	HK$40k	HK$40k	5%
Total Compensation	HK$855k	HK$855k	100%

On an industry level, roughly 91% of total compensation represents salary and 9% is other remuneration. Yangtzekiang Garment pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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.

A Look at Yangtzekiang Garment Limited's Growth Numbers

Over the last three years, Yangtzekiang Garment Limited has shrunk its earnings per share by 64% per year. Its revenue is down 36% over the previous 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. 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 Yangtzekiang Garment Limited Been A Good Investment?

With a total shareholder return of -46% over three years, Yangtzekiang Garment Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Yangtzekiang Garment pays its CEO a majority of 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 is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Yangtzekiang Garment (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: Yangtzekiang Garment 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.