Should Shareholders Reconsider Carrianna Group Holdings Company Limited's (HKG:126) CEO Compensation Package?

Key Insights

• Carrianna Group Holdings will host its Annual General Meeting on 28th of August
• CEO Rui Liang's total compensation includes salary of HK$3.86m
• Total compensation is 89% above industry average
• Over the past three years, Carrianna Group Holdings' EPS fell by 89% and over the past three years, the total loss to shareholders 70%

The results at Carrianna Group Holdings Company Limited (HKG:126) have been quite disappointing recently and CEO Rui Liang bears some responsibility for this. At the upcoming AGM on 28th of August, shareholders can hear from the board including their plans for turning around performance. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Carrianna Group Holdings

Comparing Carrianna Group Holdings Company Limited's CEO Compensation With The Industry

Our data indicates that Carrianna Group Holdings Company Limited has a market capitalization of HK$300m, and total annual CEO compensation was reported as HK$3.9m for the year to March 2024. That's a notable decrease of 15% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$3.9m.

In comparison with other companies in the Hong Kong Hospitality industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.0m. Hence, we can conclude that Rui Liang is remunerated higher than the industry median.

Component	2024	2023	Proportion (2024)
Salary	HK$3.9m	HK$4.6m	100%
Other	-	-	-
Total Compensation	HK$3.9m	HK$4.6m	100%

Talking in terms of the industry, salary represented approximately 87% of total compensation out of all the companies we analyzed, while other remuneration made up 13% of the pie. On a company level, Carrianna Group Holdings prefers to reward its CEO through a salary, opting not to pay Rui Liang through non-salary benefits. 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.

Carrianna Group Holdings Company Limited's Growth

Over the last three years, Carrianna Group Holdings Company Limited has shrunk its earnings per share by 89% per year. It saw its revenue drop 3.2% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Carrianna Group Holdings Company Limited Been A Good Investment?

The return of -70% over three years would not have pleased Carrianna Group Holdings Company Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Carrianna Group Holdings pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Carrianna Group Holdings you should be aware of, and 2 of them can't be ignored.

Switching gears from Carrianna Group 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.