We Think Shareholders Are Less Likely To Approve A Large Pay Rise For BExcellent Group Holdings Limited's (HKG:1775) CEO For Now

Key Insights

• BExcellent Group Holdings' Annual General Meeting to take place on 20th of December
• Total pay for CEO Wai Lung Tam includes HK$1.34m salary
• Total compensation is 42% above industry average
• Over the past three years, BExcellent Group Holdings' EPS grew by 7.8% and over the past three years, the total loss to shareholders 74%

In the past three years, the share price of BExcellent Group Holdings Limited (HKG:1775) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 20th of December could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for BExcellent Group Holdings

Comparing BExcellent Group Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that BExcellent Group Holdings Limited has a market capitalization of HK$86m, and reported total annual CEO compensation of HK$3.3m for the year to July 2024. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, 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$2.3m. Accordingly, our analysis reveals that BExcellent Group Holdings Limited pays Wai Lung Tam north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	HK$1.3m	HK$1.3m	41%
Other	HK$1.9m	HK$1.9m	59%
Total Compensation	HK$3.3m	HK$3.3m	100%

Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. In BExcellent Group Holdings' case, non-salary compensation represents a greater slice of total remuneration, 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.

BExcellent Group Holdings Limited's Growth

BExcellent Group Holdings Limited's earnings per share (EPS) grew 7.8% per year over the last three years. Its revenue is up 18% over the last year.

We would argue that the modest growth in revenue is a notable positive. And the improvement in EPSis modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has BExcellent Group Holdings Limited Been A Good Investment?

Few BExcellent Group Holdings Limited shareholders would feel satisfied with the return of -74% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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. That's why we did our research, and identified 2 warning signs for BExcellent Group Holdings (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

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.