Increases to Hanvey Group Holdings Limited's (HKG:8219) CEO Compensation Might Cool off for now

Key Insights

• Hanvey Group Holdings to hold its Annual General Meeting on 13th of June
• Total pay for CEO Clement Cheuk includes HK$4.84m salary
• Total compensation is 213% above industry average
• Hanvey Group Holdings' EPS grew by 34% over the past three years while total shareholder loss over the past three years was 84%

The underwhelming share price performance of Hanvey Group Holdings Limited (HKG:8219) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 13th of June. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Hanvey Group Holdings

How Does Total Compensation For Clement Cheuk Compare With Other Companies In The Industry?

According to our data, Hanvey Group Holdings Limited has a market capitalization of HK$42m, and paid its CEO total annual compensation worth HK$6.2m over the year to December 2023. That's a notable decrease of 8.3% on last year. We note that the salary portion, which stands at HK$4.84m 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$2.0m. Accordingly, our analysis reveals that Hanvey Group Holdings Limited pays Clement Cheuk north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	HK$4.8m	HK$4.2m	78%
Other	HK$1.4m	HK$2.6m	22%
Total Compensation	HK$6.2m	HK$6.8m	100%

On an industry level, around 94% of total compensation represents salary and 6% is other remuneration. In Hanvey Group Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 Hanvey Group Holdings Limited's Growth Numbers

Hanvey Group Holdings Limited's earnings per share (EPS) grew 34% per year over the last three years. In the last year, its revenue is down 32%.

This demonstrates that the company has been improving recently and is good news for the shareholders. 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 Hanvey Group Holdings Limited Been A Good Investment?

With a total shareholder return of -84% over three years, Hanvey Group Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Hanvey Group Holdings (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.

Switching gears from Hanvey Group Holdings, 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.