It's Unlikely That The CEO Of Asia Cassava Resources Holdings Limited (HKG:841) Will See A Huge Pay Rise This Year

The underwhelming share price performance of Asia Cassava Resources Holdings Limited (HKG:841) in the past three years would have disappointed many shareholders. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 30 September 2021, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

View our latest analysis for Asia Cassava Resources Holdings

Comparing Asia Cassava Resources Holdings Limited's CEO Compensation With the industry

Our data indicates that Asia Cassava Resources Holdings Limited has a market capitalization of HK$172m, and total annual CEO compensation was reported as HK$1.6m for the year to March 2021. This was the same as last year. Notably, the salary which is HK$1.55m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.9m. This suggests that Asia Cassava Resources Holdings remunerates its CEO largely in line with the industry average. Furthermore, Ming Chuan Chu directly owns HK$106m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	HK$1.6m	HK$1.6m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$1.6m	HK$1.6m	100%

On an industry level, roughly 79% of total compensation represents salary and 21% is other remuneration. Investors will find it interesting that Asia Cassava Resources Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Asia Cassava Resources Holdings Limited's Growth

Over the last three years, Asia Cassava Resources Holdings Limited has shrunk its earnings per share by 94% per year. In the last year, its revenue is up 91%.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Asia Cassava Resources Holdings Limited Been A Good Investment?

The return of -46% over three years would not have pleased Asia Cassava Resources Holdings Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Ming Chuan receives almost all of their compensation through a salary. The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Asia Cassava Resources Holdings you should be aware of, and 2 of them make us uncomfortable.

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.

If you're looking for stocks to buy, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.