It Looks Like Emperor Capital Group Limited's (HKG:717) CEO May Expect Their Salary To Be Put Under The Microscope

The results at Emperor Capital Group Limited (HKG:717) have been quite disappointing recently and CEO Daisy Yeung bears some responsibility for this. At the upcoming AGM on 25 February 2022, 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. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Emperor Capital Group

Comparing Emperor Capital Group Limited's CEO Compensation With the industry

Our data indicates that Emperor Capital Group Limited has a market capitalization of HK$499m, and total annual CEO compensation was reported as HK$1.9m for the year to September 2021. That's a modest increase of 5.5% on the prior year. Notably, the salary which is HK$1.57m, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.1m. This suggests that Emperor Capital Group remunerates its CEO largely in line with the industry average. What's more, Daisy Yeung holds HK$1.3m 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$1.6m	HK$1.5m	84%
Other	HK$288k	HK$267k	16%
Total Compensation	HK$1.9m	HK$1.8m	100%

On an industry level, around 75% of total compensation represents salary and 25% is other remuneration. Emperor Capital Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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 Emperor Capital Group Limited's Growth Numbers

Emperor Capital Group Limited has reduced its earnings per share by 80% a year over the last three years. Its revenue is down 32% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Emperor Capital Group Limited Been A Good Investment?

With a total shareholder return of -82% over three years, Emperor Capital Group 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...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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. That's why we did our research, and identified 3 warning signs for Emperor Capital Group (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.