Should Shareholders Reconsider Blue Moon Group Holdings Limited's (HKG:6993) CEO Compensation Package?

Key Insights

• Blue Moon Group Holdings will host its Annual General Meeting on 7th of June
• Salary of HK$7.60m is part of CEO Qiuping Luo's total remuneration
• Total compensation is 58% above industry average
• Over the past three years, Blue Moon Group Holdings' EPS fell by 40% and over the past three years, the total loss to shareholders 79%

The results at Blue Moon Group Holdings Limited (HKG:6993) have been quite disappointing recently and CEO Qiuping Luo bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 7th of June. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Blue Moon Group Holdings

How Does Total Compensation For Qiuping Luo Compare With Other Companies In The Industry?

According to our data, Blue Moon Group Holdings Limited has a market capitalization of HK$12b, and paid its CEO total annual compensation worth HK$8.1m over the year to December 2023. That's slightly lower by 4.8% over the previous year. We note that the salary portion, which stands at HK$7.60m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Household Products industry with market capitalizations ranging from HK$7.8b to HK$25b, the reported median CEO total compensation was HK$5.1m. Hence, we can conclude that Qiuping Luo is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	HK$7.6m	HK$8.0m	94%
Other	HK$518k	HK$518k	6%
Total Compensation	HK$8.1m	HK$8.5m	100%

On an industry level, roughly 94% of total compensation represents salary and 6% is other remuneration. Blue Moon Group Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Blue Moon Group Holdings Limited's Growth

Over the last three years, Blue Moon Group Holdings Limited has shrunk its earnings per share by 40% per year. In the last year, its revenue is down 7.8%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Blue Moon Group Holdings Limited Been A Good Investment?

Few Blue Moon Group Holdings Limited shareholders would feel satisfied with the return of -79% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Blue Moon Group Holdings that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.