Shareholders of Grand Brilliance Group Holdings Limited (HKG:8372) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 17 September 2021. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
How Does Total Compensation For Bikie Wong Compare With Other Companies In The Industry?
Our data indicates that Grand Brilliance Group Holdings Limited has a market capitalization of HK$62m, and total annual CEO compensation was reported as HK$4.1m for the year to March 2021. That's slightly lower by 6.8% over the previous year. We note that the salary portion, which stands at HK$2.82m constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.0m. Hence, we can conclude that Bikie Wong is remunerated higher than the industry median. Furthermore, Bikie Wong directly owns HK$43m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 86% of total compensation represents salary and 14% is other remuneration. Grand Brilliance Group Holdings sets aside a smaller share of compensation for salary, in comparison to the overall 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.
A Look at Grand Brilliance Group Holdings Limited's Growth Numbers
Grand Brilliance Group Holdings Limited's earnings per share (EPS) grew 41% per year over the last three years. In the last year, its revenue is up 5.2%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Grand Brilliance Group Holdings Limited Been A Good Investment?
Given the total shareholder loss of 24% over three years, many shareholders in Grand Brilliance Group Holdings Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for Grand Brilliance Group Holdings you should be aware of, and 1 of them is potentially serious.
Important note: Grand Brilliance Group Holdings 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.
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