Shareholders May Be Wary Of Increasing Hin Sang Group (International) Holding Co. Ltd.'s (HKG:6893) CEO Compensation Package

Key Insights

• Hin Sang Group (International) Holding to hold its Annual General Meeting on 28th of September
• CEO Siu Hin Pang's total compensation includes salary of HK$2.56m
• Total compensation is similar to the industry average
• Over the past three years, Hin Sang Group (International) Holding's EPS fell by 0.8% and over the past three years, the total loss to shareholders 40%

Shareholders will probably not be too impressed with the underwhelming results at Hin Sang Group (International) Holding Co. Ltd. (HKG:6893) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 28th of September. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Hin Sang Group (International) Holding

How Does Total Compensation For Siu Hin Pang Compare With Other Companies In The Industry?

According to our data, Hin Sang Group (International) Holding Co. Ltd. has a market capitalization of HK$415m, and paid its CEO total annual compensation worth HK$2.6m over the year to March 2023. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at HK$2.56m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Personal Products industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.8m. From this we gather that Siu Hin Pang is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	HK$2.6m	HK$2.5m	99%
Other	HK$18k	HK$23k	1%
Total Compensation	HK$2.6m	HK$2.5m	100%

On an industry level, roughly 71% of total compensation represents salary and 29% is other remuneration. Investors will find it interesting that Hin Sang Group (International) Holding pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Hin Sang Group (International) Holding Co. Ltd.'s Growth

Earnings per share at Hin Sang Group (International) Holding Co. Ltd. are much the same as they were three years ago, albeit slightly lower. It saw its revenue drop 32% over the last year.

The lack of EPS growth is certainly uninspiring. This is compounded by the fact revenue is actually down on last year. 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 Hin Sang Group (International) Holding Co. Ltd. Been A Good Investment?

With a total shareholder return of -40% over three years, Hin Sang Group (International) Holding Co. Ltd. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Siu Hin receives almost all of their compensation through a salary. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Hin Sang Group (International) Holding (of which 2 are concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Hin Sang Group (International) Holding 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.