Shareholders Will Likely Find Satu Holdings Limited's (HKG:8392) CEO Compensation Acceptable

Shareholders may be wondering what CEO Leung Choi She plans to do to improve the less than great performance at Satu Holdings Limited (HKG:8392) recently. At the next AGM coming up on 30 July 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for Satu Holdings

How Does Total Compensation For Leung Choi She Compare With Other Companies In The Industry?

Our data indicates that Satu Holdings Limited has a market capitalization of HK$107m, and total annual CEO compensation was reported as HK$1.2m for the year to March 2021. That's a notable increase of 48% on last year. We note that the salary portion, which stands at HK$1.15m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$3.5m. This suggests that Leung Choi She is paid below the industry median. Moreover, Leung Choi She also holds HK$65m worth of Satu Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	HK$1.2m	HK$770k	98%
Other	HK$18k	HK$18k	2%
Total Compensation	HK$1.2m	HK$788k	100%

Speaking on an industry level, nearly 80% of total compensation represents salary, while the remainder of 20% is other remuneration. Satu Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Satu Holdings Limited's Growth Numbers

Over the last three years, Satu Holdings Limited has shrunk its earnings per share by 22% per year. In the last year, its revenue is up 22%.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Satu Holdings Limited Been A Good Investment?

The return of -73% over three years would not have pleased Satu Holdings Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Leung Choi receives almost all of their compensation through a salary. The loss to shareholders over the past three years is certainly concerning. The poor performance of the share price might have something to do with the lack of earnings growth. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Satu Holdings you should be aware of, and 1 of them can't be ignored.

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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