Shareholders May Be Wary Of Increasing Amuse Group Holding Limited's (HKG:8545) CEO Compensation Package

Key Insights

• Amuse Group Holding will host its Annual General Meeting on 13th of August
• Total pay for CEO Wai Keung Li includes HK$3.94m salary
• Total compensation is 301% above industry average
• Amuse Group Holding's three-year loss to shareholders was 74% while its EPS was down 64% over the past three years

Amuse Group Holding Limited (HKG:8545) has not performed well recently and CEO Wai Keung Li will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 13th of August. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Amuse Group Holding

How Does Total Compensation For Wai Keung Li Compare With Other Companies In The Industry?

At the time of writing, our data shows that Amuse Group Holding Limited has a market capitalization of HK$30m, and reported total annual CEO compensation of HK$7.0m for the year to March 2024. That's just a smallish increase of 5.4% on last year. In particular, the salary of HK$3.94m, makes up a fairly large portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Leisure industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.7m. This suggests that Wai Keung Li is paid more than the median for the industry. What's more, Wai Keung Li holds HK$5.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	HK$3.9m	HK$3.6m	56%
Other	HK$3.0m	HK$3.0m	44%
Total Compensation	HK$7.0m	HK$6.6m	100%

Speaking on an industry level, nearly 92% of total compensation represents salary, while the remainder of 8% is other remuneration. Amuse Group Holding pays a modest slice of remuneration through salary, as compared to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Amuse Group Holding Limited's Growth Numbers

Over the last three years, Amuse Group Holding Limited has shrunk its earnings per share by 64% per year. In the last year, its revenue is down 7.1%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Amuse Group Holding Limited Been A Good Investment?

The return of -74% over three years would not have pleased Amuse Group Holding Limited shareholders. This suggests it would be unwise for the company to pay the CEO too 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 3 which are a bit unpleasant) in Amuse Group Holding we think you should know about.

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.

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