It's Probably Less Likely That Ajisen (China) Holdings Limited's (HKG:538) CEO Will See A Huge Pay Rise This Year

Key Insights

• Ajisen (China) Holdings' Annual General Meeting to take place on 20th of May
• Salary of CN¥1.94m is part of CEO Wai Poon's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Ajisen (China) Holdings' EPS grew by 60% and over the past three years, the total loss to shareholders 5.0%

We've discovered 1 warning sign about Ajisen (China) Holdings. View them for free.

As many shareholders of Ajisen (China) Holdings Limited (HKG:538) will be aware, they have not made a gain on their investment in the past three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 20th of May. They could also influence management through voting on resolutions such as executive remuneration. 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 Ajisen (China) Holdings

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

Our data indicates that Ajisen (China) Holdings Limited has a market capitalization of HK$873m, and total annual CEO compensation was reported as CN¥2.1m for the year to December 2024. Notably, that's an increase of 9.2% over the year before. In particular, the salary of CN¥1.94m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Hospitality industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥2.2m. So it looks like Ajisen (China) Holdings compensates Wai Poon in line with the median for the industry. Furthermore, Wai Poon directly owns HK$31m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	CN¥1.9m	CN¥1.8m	93%
Other	CN¥137k	CN¥92k	7%
Total Compensation	CN¥2.1m	CN¥1.9m	100%

On an industry level, around 83% of total compensation represents salary and 17% is other remuneration. Ajisen (China) Holdings pays out 93% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Ajisen (China) Holdings Limited's Growth

Ajisen (China) Holdings Limited's earnings per share (EPS) grew 60% per year over the last three years. It saw its revenue drop 5.4% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Ajisen (China) Holdings Limited Been A Good Investment?

Since shareholders would have lost about 5.0% over three years, some Ajisen (China) Holdings Limited investors would surely be feeling negative emotions. 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.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Ajisen (China) Holdings that investors should be aware of in a dynamic business environment.

Important note: Ajisen (China) Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.