Performance at B & S International Holdings Ltd. (HKG:1705) has not been particularly rosy recently and shareholders will likely be holding CEO Andrew Chan and the board accountable for this. The next AGM coming up on 07 September 2021 will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. From our analysis below, we think CEO compensation looks appropriate for now.
How Does Total Compensation For Andrew Chan Compare With Other Companies In The Industry?
At the time of writing, our data shows that B & S International Holdings Ltd. has a market capitalization of HK$236m, and reported total annual CEO compensation of HK$751k for the year to March 2021. That's slightly lower by 7.3% over the previous year. Notably, the salary which is HK$733.0k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.3m. In other words, B & S International Holdings pays its CEO lower than the industry median. What's more, Andrew Chan holds HK$59m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 88% of total compensation out of all the companies we analyzed, while other remuneration made up 12% of the pie. B & S International 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.
B & S International Holdings Ltd.'s Growth
Over the last three years, B & S International Holdings Ltd. has shrunk its earnings per share by 68% per year. It saw its revenue drop 6.0% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet 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 B & S International Holdings Ltd. Been A Good Investment?
The return of -47% over three years would not have pleased B & S International Holdings Ltd. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
B & S International Holdings pays its CEO a majority of compensation through a salary. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in 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. We did our research and identified 5 warning signs (and 1 which can't be ignored) in B & S International Holdings 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.
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