Harbour Equine Holdings Limited's (HKG:8377) CEO Will Probably Find It Hard To See A Huge Raise This Year

Key Insights

• Harbour Equine Holdings' Annual General Meeting to take place on 6th of June
• Salary of HK$1.62m is part of CEO Albert Wong's total remuneration
• Total compensation is similar to the industry average
• Harbour Equine Holdings' EPS grew by 1.7% over the past three years while total shareholder loss over the past three years was 70%

The underwhelming share price performance of Harbour Equine Holdings Limited (HKG:8377) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 6th of June. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Harbour Equine Holdings

Comparing Harbour Equine Holdings Limited's CEO Compensation With The Industry

According to our data, Harbour Equine Holdings Limited has a market capitalization of HK$74m, and paid its CEO total annual compensation worth HK$1.6m over the year to December 2023. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at HK$1.62m 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$2.0m. From this we gather that Albert Wong is paid around the median for CEOs in the industry. Furthermore, Albert Wong directly owns HK$22m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	HK$1.6m	HK$1.6m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$1.6m	HK$1.6m	100%

On an industry level, roughly 94% of total compensation represents salary and 6% is other remuneration. Harbour Equine Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Harbour Equine Holdings Limited's Growth

Harbour Equine Holdings Limited has seen its earnings per share (EPS) increase by 1.7% a year over the past three years. It saw its revenue drop 9.5% over the last year.

We generally like to see a little revenue growth, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Harbour Equine Holdings Limited Been A Good Investment?

Few Harbour Equine Holdings Limited shareholders would feel satisfied with the return of -70% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Albert receives almost all of their compensation through a salary. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Harbour Equine Holdings that you should be aware of before investing.

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.

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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.