Here's Why Shareholders May Want To Be Cautious With Increasing Wison Engineering Services Co. Ltd.'s (HKG:2236) CEO Pay Packet
Key Insights
- Wison Engineering Services will host its Annual General Meeting on 6th of June
- CEO Hongliang Zhou's total compensation includes salary of CN¥2.48m
- Total compensation is 159% above industry average
- Wison Engineering Services' EPS grew by 34% over the past three years while total shareholder loss over the past three years was 6.6%
In the past three years, shareholders of Wison Engineering Services Co. Ltd. (HKG:2236) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 6th of June. They could also influence management through voting on resolutions such as executive remuneration. 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 Wison Engineering Services
How Does Total Compensation For Hongliang Zhou Compare With Other Companies In The Industry?
Our data indicates that Wison Engineering Services Co. Ltd. has a market capitalization of HK$1.2b, and total annual CEO compensation was reported as CN¥3.8m for the year to December 2024. That's a notable increase of 24% on last year. In particular, the salary of CN¥2.48m, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the Hong Kong Energy Services industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.5m. Hence, we can conclude that Hongliang Zhou is remunerated higher than the industry median. Furthermore, Hongliang Zhou directly owns HK$1.5m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | CN¥2.5m | CN¥2.4m | 65% |
| Other | CN¥1.4m | CN¥664k | 35% |
| Total Compensation | CN¥3.8m | CN¥3.1m | 100% |
On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. It's interesting to note that Wison Engineering Services allocates a smaller portion of compensation to salary in comparison to the broader 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.
Wison Engineering Services Co. Ltd.'s Growth
Wison Engineering Services Co. Ltd.'s earnings per share (EPS) grew 34% per year over the last three years. Its revenue is up 47% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Wison Engineering Services Co. Ltd. Been A Good Investment?
With a three year total loss of 6.6% for the shareholders, Wison Engineering Services Co. Ltd. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
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 fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. 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 compensation is one thing, but it is also interesting to check if the CEO is buying or selling Wison Engineering Services (free visualization of insider trades).
Important note: Wison Engineering Services 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.