We Think Shareholders Are Less Likely To Approve A Large Pay Rise For CEC International Holdings Limited's (HKG:759) CEO For Now

Under the guidance of CEO Fung Kwan Tang, CEC International Holdings Limited (HKG:759) has performed reasonably well recently. As shareholders go into the upcoming AGM on 29 September 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for CEC International Holdings

How Does Total Compensation For Fung Kwan Tang Compare With Other Companies In The Industry?

According to our data, CEC International Holdings Limited has a market capitalization of HK$453m, and paid its CEO total annual compensation worth HK$3.8m over the year to April 2021. Notably, that's an increase of 36% over the year before. We note that the salary portion, which stands at HK$3.44m 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$1.3m. Hence, we can conclude that Fung Kwan Tang is remunerated higher than the industry median. Moreover, Fung Kwan Tang also holds HK$2.9m worth of CEC International 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$3.4m	HK$2.5m	91%
Other	HK$330k	HK$240k	9%
Total Compensation	HK$3.8m	HK$2.8m	100%

On an industry level, around 88% of total compensation represents salary and 12% is other remuneration. Our data reveals that CEC International Holdings allocates salary more or less in line with the wider market. 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 CEC International Holdings Limited's Growth Numbers

Over the past three years, CEC International Holdings Limited has seen its earnings per share (EPS) grow by 121% per year. It achieved revenue growth of 7.4% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has CEC International Holdings Limited Been A Good Investment?

With a total shareholder return of 5.4% over three years, CEC International Holdings Limited has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for CEC International Holdings that investors should be aware of in a dynamic business environment.

Switching gears from CEC International 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.
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