Should Shareholders Worry About Travel Expert (Asia) Enterprises Limited's (HKG:1235) CEO Compensation Package?

The underwhelming performance at Travel Expert (Asia) Enterprises Limited (HKG:1235) recently has probably not pleased shareholders. The next AGM coming up on 18 August 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. The data we gathered below shows that CEO compensation looks acceptable for now.

See our latest analysis for Travel Expert (Asia) Enterprises

Comparing Travel Expert (Asia) Enterprises Limited's CEO Compensation With the industry

Our data indicates that Travel Expert (Asia) Enterprises Limited has a market capitalization of HK$116m, and total annual CEO compensation was reported as HK$413k for the year to March 2021. Notably, that's a decrease of 57% over the year before. Notably, the salary which is HK$397.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.8m. In other words, Travel Expert (Asia) Enterprises pays its CEO lower than the industry median. Furthermore, Hang Fan Cheng directly owns HK$1.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	HK$397k	HK$946k	96%
Other	HK$16k	HK$18k	4%
Total Compensation	HK$413k	HK$964k	100%

On an industry level, roughly 90% of total compensation represents salary and 10% is other remuneration. Travel Expert (Asia) Enterprises 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 Travel Expert (Asia) Enterprises Limited's Growth Numbers

Travel Expert (Asia) Enterprises Limited has reduced its earnings per share by 76% a year over the last three years. Its revenue is down 98% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Travel Expert (Asia) Enterprises Limited Been A Good Investment?

With a total shareholder return of -58% over three years, Travel Expert (Asia) Enterprises Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Hang Fan receives almost all of their compensation through a salary. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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 3 warning signs (and 2 which shouldn't be ignored) in Travel Expert (Asia) Enterprises 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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