We Think Shareholders Are Less Likely To Approve A Large Pay Rise For San Miguel Brewery Hong Kong Limited's (HKG:236) CEO For Now

In the past three years, the share price of San Miguel Brewery Hong Kong Limited (HKG:236) 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. The AGM coming up on the 26 April 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. 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.

Check out our latest analysis for San Miguel Brewery Hong Kong

Comparing San Miguel Brewery Hong Kong Limited's CEO Compensation With the industry

Our data indicates that San Miguel Brewery Hong Kong Limited has a market capitalization of HK$355m, and total annual CEO compensation was reported as HK$2.7m for the year to December 2020. This means that the compensation hasn't changed much from last year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$2.7m.

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$2.0m. Accordingly, our analysis reveals that San Miguel Brewery Hong Kong Limited pays Filipin Torralba north of the industry median.

Component	2020	2019	Proportion (2020)
Salary	HK$2.7m	HK$2.8m	100%
Other	-	-	-
Total Compensation	HK$2.7m	HK$2.8m	100%

On an industry level, roughly 90% of total compensation represents salary and 10% is other remuneration. Speaking on a company level, San Miguel Brewery Hong Kong prefers to tread along a traditional path, disbursing all compensation through a salary. 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 San Miguel Brewery Hong Kong Limited's Growth Numbers

Over the past three years, San Miguel Brewery Hong Kong Limited has seen its earnings per share (EPS) grow by 11% per year. In the last year, its revenue is down 4.2%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has San Miguel Brewery Hong Kong Limited Been A Good Investment?

Since shareholders would have lost about 21% over three years, some San Miguel Brewery Hong Kong Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

San Miguel Brewery Hong Kong rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for San Miguel Brewery Hong Kong that investors should look into moving forward.

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. 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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