Shareholders Will Probably Hold Off On Increasing BExcellent Group Holdings Limited's (HKG:1775) CEO Compensation For The Time Being

Key Insights

• BExcellent Group Holdings will host its Annual General Meeting on 19th of December
• Salary of HK$1.34m is part of CEO Wai Lung Tam's total remuneration
• Total compensation is 86% above industry average
• BExcellent Group Holdings' EPS grew by 2.9% over the past three years while total shareholder loss over the past three years was 62%

The underwhelming share price performance of BExcellent Group Holdings Limited (HKG:1775) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 19th of December could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for BExcellent Group Holdings

How Does Total Compensation For Wai Lung Tam Compare With Other Companies In The Industry?

At the time of writing, our data shows that BExcellent Group Holdings Limited has a market capitalization of HK$96m, and reported total annual CEO compensation of HK$3.3m for the year to July 2023. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$1.3m.

In comparison with other companies in the Hong Kong Consumer Services industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.7m. This suggests that Wai Lung Tam is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	HK$1.3m	HK$1.3m	41%
Other	HK$1.9m	HK$2.0m	59%
Total Compensation	HK$3.3m	HK$3.3m	100%

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. In BExcellent Group Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at BExcellent Group Holdings Limited's Growth Numbers

BExcellent Group Holdings Limited's earnings per share (EPS) grew 2.9% per year over the last three years. Its revenue is down 3.8% over the previous year.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has BExcellent Group Holdings Limited Been A Good Investment?

With a total shareholder return of -62% over three years, BExcellent Group Holdings Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. 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. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for BExcellent Group Holdings (1 makes us a bit uncomfortable!) 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.