Here's Why It's Unlikely That Goldway Education Group Limited's (HKG:8160) CEO Will See A Pay Rise This Year

The results at Goldway Education Group Limited (HKG:8160) have been quite disappointing recently and CEO Lick Keung Cheung bears some responsibility for this. At the upcoming AGM on 06 August 2021, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Goldway Education Group

Comparing Goldway Education Group Limited's CEO Compensation With the industry

Our data indicates that Goldway Education Group Limited has a market capitalization of HK$52m, and total annual CEO compensation was reported as HK$1.8m for the year to March 2021. We note that's an increase of 22% above last year. Notably, the salary which is HK$1.79m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.3m. Hence, we can conclude that Lick Keung Cheung is remunerated higher than the industry median. What's more, Lick Keung Cheung holds HK$2.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	HK$1.8m	HK$1.5m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$1.8m	HK$1.5m	100%

Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. Goldway Education Group has gone down a largely traditional route, paying Lick Keung Cheung a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Goldway Education Group Limited's Growth

Over the last three years, Goldway Education Group Limited has shrunk its earnings per share by 90% per year. In the last year, its revenue is down 11%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Goldway Education Group Limited Been A Good Investment?

The return of -80% over three years would not have pleased Goldway Education Group Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Goldway Education Group pays its CEO a majority of compensation through a salary. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 4 warning signs for Goldway Education Group (2 are potentially serious!) that you should be aware of before investing here.

Switching gears from Goldway Education Group, 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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