We Think Shareholders Are Less Likely To Approve A Pay Rise For CA Cultural Technology Group Limited's (HKG:1566) CEO For Now

In the past three years, shareholders of CA Cultural Technology Group Limited (HKG:1566) have seen a loss on their investment. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 02 September 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for CA Cultural Technology Group

How Does Total Compensation For Jason Chong Compare With Other Companies In The Industry?

At the time of writing, our data shows that CA Cultural Technology Group Limited has a market capitalization of HK$2.6b, and reported total annual CEO compensation of HK$2.0m for the year to March 2021. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$744k.

On comparing similar companies from the same industry with market caps ranging from HK$1.6b to HK$6.2b, we found that the median CEO total compensation was HK$2.7m. This suggests that CA Cultural Technology Group remunerates its CEO largely in line with the industry average. Moreover, Jason Chong also holds HK$819m worth of CA Cultural Technology Group 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$744k	HK$744k	38%
Other	HK$1.2m	HK$1.3m	62%
Total Compensation	HK$2.0m	HK$2.0m	100%

Speaking on an industry level, nearly 90% of total compensation represents salary, while the remainder of 10% is other remuneration. It's interesting to note that CA Cultural Technology Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at CA Cultural Technology Group Limited's Growth Numbers

CA Cultural Technology Group Limited's earnings per share (EPS) grew 57% per year over the last three years. In the last year, its revenue is up 22%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 CA Cultural Technology Group Limited Been A Good Investment?

With a three year total loss of 3.3% for the shareholders, CA Cultural Technology Group Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 6 warning signs for CA Cultural Technology Group (2 are potentially serious!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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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