We Think Hin Sang Group (International) Holding Co. Ltd.'s (HKG:6893) CEO Compensation Package Needs To Be Put Under A Microscope

The results at Hin Sang Group (International) Holding Co. Ltd. (HKG:6893) have been quite disappointing recently and CEO Siu Hin Pang bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 29 September 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View 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$371m, and paid its CEO total annual compensation worth HK$2.7m over the year to March 2021. That's a notable decrease of 8.9% on last year. We note that the salary portion, which stands at HK$2.54m 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$1.6m. Accordingly, our analysis reveals that Hin Sang Group (International) Holding Co. Ltd. pays Siu Hin Pang north of the industry median. Moreover, Siu Hin Pang also holds HK$2.9m worth of Hin Sang Group (International) Holding stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	HK$2.5m	HK$2.6m	95%
Other	HK$137k	HK$373k	5%
Total Compensation	HK$2.7m	HK$2.9m	100%

On an industry level, around 91% of total compensation represents salary and 9% is other remuneration. There isn't a significant difference between Hin Sang Group (International) Holding and the broader market, in terms of salary allocation in the overall compensation package. 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

Over the last three years, Hin Sang Group (International) Holding Co. Ltd. has shrunk its earnings per share by 85% per year. Its revenue is down 32% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Hin Sang Group (International) Holding Co. Ltd. Been A Good Investment?

Few Hin Sang Group (International) Holding Co. Ltd. shareholders would feel satisfied with the return of -71% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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, 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. We did our research and identified 3 warning signs (and 2 which can't be ignored) in Hin Sang Group (International) Holding we think you should know about.

Switching gears from Hin Sang Group (International) Holding, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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