Shareholders Will Probably Hold Off On Increasing Grand Brilliance Group Holdings Limited's (HKG:8372) CEO Compensation For The Time Being

Key Insights

• Grand Brilliance Group Holdings to hold its Annual General Meeting on 11th of September
• Total pay for CEO Bikie Wong includes HK$3.77m salary
• The overall pay is 230% above the industry average
• Grand Brilliance Group Holdings' total shareholder return over the past three years was 33% while its EPS was down 0.01% over the past three years

Despite positive share price growth of 33% for Grand Brilliance Group Holdings Limited (HKG:8372) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 11th of September. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Grand Brilliance Group Holdings

How Does Total Compensation For Bikie Wong Compare With Other Companies In The Industry?

At the time of writing, our data shows that Grand Brilliance Group Holdings Limited has a market capitalization of HK$74m, and reported total annual CEO compensation of HK$5.3m for the year to March 2024. We note that's an increase of 26% above last year. We note that the salary portion, which stands at HK$3.77m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Hong Kong Healthcare industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.6m. Accordingly, our analysis reveals that Grand Brilliance Group Holdings Limited pays Bikie Wong north of the industry median. Furthermore, Bikie Wong directly owns HK$52m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	HK$3.8m	HK$3.0m	71%
Other	HK$1.6m	HK$1.2m	29%
Total Compensation	HK$5.3m	HK$4.2m	100%

Talking in terms of the industry, salary represented approximately 76% of total compensation out of all the companies we analyzed, while other remuneration made up 24% of the pie. Our data reveals that Grand Brilliance Group Holdings allocates salary more or less in line with the wider market. 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 saw earnings per share stay pretty flat over the last three years. In the last year, its revenue is up 6.8%.

Its a bit disappointing to see that the company has failed to grow its EPS. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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?

Grand Brilliance Group Holdings Limited has generated a total shareholder return of 33% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Grand Brilliance Group Holdings you should be aware of, and 2 of them are concerning.

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.