Should Shareholders Reconsider Asia Cassava Resources Holdings Limited's (HKG:841) CEO Compensation Package?

Key Insights

• Asia Cassava Resources Holdings' Annual General Meeting to take place on 30th of September
• Salary of HK$1.50m is part of CEO Ming Chuan Chu's total remuneration
• The total compensation is similar to the average for the industry
• Asia Cassava Resources Holdings' EPS declined by 89% over the past three years while total shareholder loss over the past three years was 69%

Asia Cassava Resources Holdings Limited (HKG:841) has not performed well recently and CEO Ming Chuan Chu will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 30th of September. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Asia Cassava Resources Holdings

Comparing Asia Cassava Resources Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Asia Cassava Resources Holdings Limited has a market capitalization of HK$50m, and reported total annual CEO compensation of HK$1.5m for the year to March 2024. There was no change in the compensation compared to last year. In particular, the salary of HK$1.50m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Food industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. So it looks like Asia Cassava Resources Holdings compensates Ming Chuan Chu in line with the median for the industry. Furthermore, Ming Chuan Chu directly owns HK$31m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	HK$1.5m	HK$1.5m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$1.5m	HK$1.5m	100%

Speaking on an industry level, nearly 73% of total compensation represents salary, while the remainder of 27% is other remuneration. Asia Cassava Resources Holdings has gone down a largely traditional route, paying Ming Chuan Chu a high salary, giving it preference over non-salary benefits. 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.

Asia Cassava Resources Holdings Limited's Growth

Asia Cassava Resources Holdings Limited has reduced its earnings per share by 89% a year over the last three years. Its revenue is down 70% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Asia Cassava Resources Holdings Limited Been A Good Investment?

With a total shareholder return of -69% over three years, Asia Cassava Resources Holdings Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Asia Cassava Resources Holdings pays its CEO a majority of compensation through a salary. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 4 warning signs for Asia Cassava Resources Holdings you should be aware of, and 3 of them don't sit too well with us.

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. 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.