Shareholders Will Probably Hold Off On Increasing Aeso Holding Limited's (HKG:8341) CEO Compensation For The Time Being

In the past three years, the share price of Aeso Holding Limited (HKG:8341) 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 30 September 2022 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Aeso Holding

How Does Total Compensation For Siu Chung Chan Compare With Other Companies In The Industry?

Our data indicates that Aeso Holding Limited has a market capitalization of HK$32m, and total annual CEO compensation was reported as HK$2.7m for the year to March 2022. That's a fairly small increase of 4.1% over the previous year. Notably, the salary which is HK$2.18m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.9m. This suggests that Siu Chung Chan is paid more than the median for the industry. Furthermore, Siu Chung Chan directly owns HK$4.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	HK$2.2m	HK$2.2m	82%
Other	HK$485k	HK$381k	18%
Total Compensation	HK$2.7m	HK$2.6m	100%

Talking in terms of the industry, salary represented approximately 76% of total compensation out of all the companies we analyzed, while other remuneration made up 24% of the pie. Our data reveals that Aeso Holding 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.

Aeso Holding Limited's Growth

Aeso Holding Limited has seen its earnings per share (EPS) increase by 71% a year over the past three years. Its revenue is up 63% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Aeso Holding Limited Been A Good Investment?

With a total shareholder return of -95% over three years, Aeso Holding Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. 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.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Aeso Holding (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Aeso Holding, 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.