Shareholders May Be A Little Conservative With YGM Trading Limited's (HKG:375) CEO Compensation For Now

Key Insights

• YGM Trading's Annual General Meeting to take place on 26th of September
• CEO William Fu's total compensation includes salary of HK$1.81m
• The overall pay is comparable to the industry average
• YGM Trading's EPS declined by 48% over the past three years while total shareholder return over the past three years was 4.9%

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The share price of YGM Trading Limited (HKG:375) has struggled to grow by much over the last few years and probably has to do with the fact that earnings growth has gone backwards. The upcoming AGM on 26th of September may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

See our latest analysis for YGM Trading

How Does Total Compensation For William Fu Compare With Other Companies In The Industry?

Our data indicates that YGM Trading Limited has a market capitalization of HK$199m, and total annual CEO compensation was reported as HK$1.9m for the year to March 2025. That's slightly lower by 7.2% over the previous year. We note that the salary portion, which stands at HK$1.81m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Luxury industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.2m. This suggests that YGM Trading remunerates its CEO largely in line with the industry average. What's more, William Fu holds HK$2.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. Although there is a difference in how total compensation is set, YGM Trading more or less reflects the market in terms of setting the salary. 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 YGM Trading Limited's Growth Numbers

Over the last three years, YGM Trading Limited has shrunk its earnings per share by 48% per year. In the last year, its revenue is down 25%.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has YGM Trading Limited Been A Good Investment?

YGM Trading Limited has generated a total shareholder return of 4.9% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

While it's true that the share price growth hasn't been bad, it's hard to overlook the lack of earnings growth and this makes us question whether there will be any strong catalyst for the stock to improve. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for YGM Trading that investors should think about before committing capital to this 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.