We Think Shareholders Are Less Likely To Approve A Pay Rise For Vico International Holdings Limited's (HKG:1621) CEO For Now

In the past three years, the share price of Vico International Holdings Limited (HKG:1621) has struggled to grow and now shareholders are sitting on a loss. 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 06 September 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. 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 Vico International Holdings

How Does Total Compensation For Eric Hui Compare With Other Companies In The Industry?

At the time of writing, our data shows that Vico International Holdings Limited has a market capitalization of HK$144m, and reported total annual CEO compensation of HK$668k for the year to March 2021. Notably, that's an increase of 41% over the year before. We note that the salary portion, which stands at HK$650.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$915k. So it looks like Vico International Holdings compensates Eric Hui in line with the median for the industry.

Component	2021	2020	Proportion (2021)
Salary	HK$650k	HK$455k	97%
Other	HK$18k	HK$18k	3%
Total Compensation	HK$668k	HK$473k	100%

On an industry level, roughly 93% of total compensation represents salary and 7% is other remuneration. Vico International Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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 Vico International Holdings Limited's Growth Numbers

Over the past three years, Vico International Holdings Limited has seen its earnings per share (EPS) grow by 24% per year. It saw its revenue drop 22% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Vico International Holdings Limited Been A Good Investment?

The return of -32% over three years would not have pleased Vico International Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Eric receives almost all of their compensation through a salary. 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. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Vico International Holdings that investors should think about before committing capital to this stock.

Switching gears from Vico International Holdings, 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.
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