We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Aeso Holding Limited's (HKG:8341) CEO For Now

Key Insights

• Aeso Holding's Annual General Meeting to take place on 28th of September
• Salary of HK$2.18m is part of CEO Siu Chung Chan's total remuneration
• Total compensation is 50% above industry average
• Over the past three years, Aeso Holding's EPS grew by 133% and over the past three years, the total loss to shareholders 72%

Shareholders of Aeso Holding Limited (HKG:8341) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 28th of September. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Aeso Holding

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

According to our data, Aeso Holding Limited has a market capitalization of HK$14m, and paid its CEO total annual compensation worth HK$2.7m over the year to March 2023. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at HK$2.18m constitutes the majority of total compensation received by the CEO.

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$1.8m. This suggests that Siu Chung Chan is paid more than the median for the industry. Furthermore, Siu Chung Chan directly owns HK$1.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	HK$2.2m	HK$2.2m	82%
Other	HK$482k	HK$485k	18%
Total Compensation	HK$2.7m	HK$2.7m	100%

On an industry level, roughly 82% of total compensation represents salary and 18% is other remuneration. There isn't a significant difference between Aeso Holding and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Aeso Holding Limited's Growth Numbers

Aeso Holding Limited has seen its earnings per share (EPS) increase by 133% a year over the past three years. It achieved revenue growth of 13% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Aeso Holding Limited Been A Good Investment?

With a total shareholder return of -72% over three years, Aeso Holding Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Aeso Holding (2 are significant!) that you should be aware of before investing here.

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.