Shareholders May Be Wary Of Increasing MS Concept Limited's (HKG:8447) CEO Compensation Package

Key Insights

• MS Concept will host its Annual General Meeting on 2nd of August
• Salary of HK$3.60m is part of CEO John Kwong's total remuneration
• The overall pay is 77% above the industry average
• MS Concept's three-year loss to shareholders was 72% while its EPS was down 106% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at MS Concept Limited (HKG:8447) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 2nd of August. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for MS Concept

How Does Total Compensation For John Kwong Compare With Other Companies In The Industry?

According to our data, MS Concept Limited has a market capitalization of HK$41m, and paid its CEO total annual compensation worth HK$3.6m over the year to March 2024. That's a modest increase of 3.4% on the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$3.6m.

In comparison with other companies in the Hong Kong Hospitality industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.0m. Hence, we can conclude that John Kwong is remunerated higher than the industry median.

Component	2024	2023	Proportion (2024)
Salary	HK$3.6m	HK$3.5m	100%
Other	-	-	-
Total Compensation	HK$3.6m	HK$3.5m	100%

Speaking on an industry level, nearly 87% of total compensation represents salary, while the remainder of 13% is other remuneration. At the company level, MS Concept pays John Kwong solely through a salary, preferring to go down a conventional route. 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 MS Concept Limited's Growth Numbers

MS Concept Limited has reduced its earnings per share by 106% a year over the last three years. Its revenue is down 9.9% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 MS Concept Limited Been A Good Investment?

With a total shareholder return of -72% over three years, MS Concept Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

MS Concept rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for MS Concept that investors should be aware of in a dynamic business environment.

Switching gears from MS Concept, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com