We Think Shareholders Are Less Likely To Approve A Pay Rise For Edvantage Group Holdings Limited's (HKG:382) CEO For Now

Key Insights

• Edvantage Group Holdings will host its Annual General Meeting on 19th of January
• CEO Yi Man Liu's total compensation includes salary of CN¥1.99m
• The total compensation is similar to the average for the industry
• Over the past three years, Edvantage Group Holdings' EPS grew by 25% and over the past three years, the total loss to shareholders 68%

Shareholders of Edvantage Group Holdings Limited (HKG:382) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 19th of January. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. 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 Edvantage Group Holdings

How Does Total Compensation For Yi Man Liu Compare With Other Companies In The Industry?

Our data indicates that Edvantage Group Holdings Limited has a market capitalization of HK$2.7b, and total annual CEO compensation was reported as CN¥2.6m for the year to August 2023. That's a notable increase of 44% on last year. In particular, the salary of CN¥1.99m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the Hong Kong Consumer Services industry with market caps ranging from HK$1.6b to HK$6.3b, we found that the median CEO total compensation was CN¥2.4m. So it looks like Edvantage Group Holdings compensates Yi Man Liu in line with the median for the industry. Furthermore, Yi Man Liu directly owns HK$2.6m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥2.0m	CN¥1.9m	75%
Other	CN¥650k		25%
Total Compensation	CN¥2.6m	CN¥1.8m	100%

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. Our data reveals that Edvantage Group Holdings allocates salary more or less in line with the wider market. 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.

A Look at Edvantage Group Holdings Limited's Growth Numbers

Edvantage Group Holdings Limited's earnings per share (EPS) grew 25% per year over the last three years. In the last year, its revenue is up 17%.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Edvantage Group Holdings Limited Been A Good Investment?

The return of -68% over three years would not have pleased Edvantage Group Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Edvantage Group Holdings that you should be aware of before investing.

Switching gears from Edvantage 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.