We Discuss Why Vitasoy International Holdings Limited's (HKG:345) CEO Compensation May Be Closely Reviewed

Shareholders will probably not be too impressed with the underwhelming results at Vitasoy International Holdings Limited (HKG:345) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 23 August 2021. 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 Vitasoy International Holdings

How Does Total Compensation For Roberto Guidetti Compare With Other Companies In The Industry?

Our data indicates that Vitasoy International Holdings Limited has a market capitalization of HK$22b, and total annual CEO compensation was reported as HK$19m for the year to March 2021. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$7.4m.

For comparison, other companies in the same industry with market capitalizations ranging between HK$16b and HK$50b had a median total CEO compensation of HK$10m. This suggests that Roberto Guidetti is paid more than the median for the industry. Furthermore, Roberto Guidetti directly owns HK$104m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	HK$7.4m	HK$7.4m	40%
Other	HK$11m	HK$11m	60%
Total Compensation	HK$19m	HK$18m	100%

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. Vitasoy International Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Vitasoy International Holdings Limited's Growth Numbers

Over the last three years, Vitasoy International Holdings Limited has shrunk its earnings per share by 2.5% per year. In the last year, its revenue is up 4.0%.

Its a bit disappointing to see that the company has failed to grow its EPS. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Vitasoy International Holdings Limited Been A Good Investment?

With a three year total loss of 18% for the shareholders, Vitasoy International Holdings Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Vitasoy International Holdings that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.
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