Oi Wah Pawnshop Credit Holdings Limited's (HKG:1319) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Oi Wah Pawnshop Credit Holdings will host its Annual General Meeting on 7th of August
• Total pay for CEO Edward Chan includes HK$1.80m salary
• Total compensation is 456% above industry average
• Oi Wah Pawnshop Credit Holdings' EPS declined by 2.4% over the past three years while total shareholder loss over the past three years was 1.1%

The results at Oi Wah Pawnshop Credit Holdings Limited (HKG:1319) have been quite disappointing recently and CEO Edward Chan bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 7th 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.

See our latest analysis for Oi Wah Pawnshop Credit Holdings

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

At the time of writing, our data shows that Oi Wah Pawnshop Credit Holdings Limited has a market capitalization of HK$449m, and reported total annual CEO compensation of HK$6.1m for the year to February 2024. Notably, that's an increase of 15% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$1.8m.

For comparison, other companies in the Hong Kong Consumer Finance industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.1m. Accordingly, our analysis reveals that Oi Wah Pawnshop Credit Holdings Limited pays Edward Chan north of the industry median. Furthermore, Edward Chan directly owns HK$12m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	HK$1.8m	HK$1.7m	29%
Other	HK$4.3m	HK$3.6m	71%
Total Compensation	HK$6.1m	HK$5.3m	100%

On an industry level, around 78% of total compensation represents salary and 22% is other remuneration. Oi Wah Pawnshop Credit Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Oi Wah Pawnshop Credit Holdings Limited's Growth

Over the last three years, Oi Wah Pawnshop Credit Holdings Limited has shrunk its earnings per share by 2.4% per year. Its revenue is up 2.2% over the last year.

Its a bit disappointing to see that the company has failed to grow its EPS. The fairly low revenue growth fails to impress given that the EPS is down. 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 Oi Wah Pawnshop Credit Holdings Limited Been A Good Investment?

With a three year total loss of 1.1% for the shareholders, Oi Wah Pawnshop Credit Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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. In our study, we found 3 warning signs for Oi Wah Pawnshop Credit Holdings you should be aware of, and 1 of them shouldn't be ignored.

Important note: Oi Wah Pawnshop Credit 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.

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