It Looks Like South China Holdings Company Limited's (HKG:413) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• South China Holdings to hold its Annual General Meeting on 27th of June
• Salary of HK$3.78m is part of CEO Christina Cheung's total remuneration
• Total compensation is 123% above industry average
• South China Holdings' EPS declined by 56% over the past three years while total shareholder loss over the past three years was 57%

South China Holdings Company Limited (HKG:413) has not performed well recently and CEO Christina Cheung will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 27th of June. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for South China Holdings

Comparing South China Holdings Company Limited's CEO Compensation With The Industry

Our data indicates that South China Holdings Company Limited has a market capitalization of HK$571m, and total annual CEO compensation was reported as HK$4.0m for the year to December 2023. This was the same amount the CEO received in the prior year. We note that the salary portion, which stands at HK$3.78m 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$1.8m. Accordingly, our analysis reveals that South China Holdings Company Limited pays Christina Cheung north of the industry median. Furthermore, Christina Cheung directly owns HK$1.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	HK$3.8m	HK$3.8m	95%
Other	HK$199k	HK$199k	5%
Total Compensation	HK$4.0m	HK$4.0m	100%

On an industry level, around 92% of total compensation represents salary and 8% is other remuneration. There isn't a significant difference between South China Holdings and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at South China Holdings Company Limited's Growth Numbers

Over the last three years, South China Holdings Company Limited has shrunk its earnings per share by 56% per year. Its revenue is down 24% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has South China Holdings Company Limited Been A Good Investment?

Few South China Holdings Company Limited shareholders would feel satisfied with the return of -57% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

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 pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for South China Holdings you should be aware of, and 2 of them don't sit too well with us.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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

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