Should Shareholders Worry About Green Future Food Hydrocolloid Marine Science Company Limited's (HKG:1084) CEO Compensation Package?

Key Insights

• Green Future Food Hydrocolloid Marine Science to hold its Annual General Meeting on 7th of June
• CEO Kam Chung Chan's total compensation includes salary of CN¥899.0k
• Total compensation is 34% below industry average
• Green Future Food Hydrocolloid Marine Science's EPS declined by 3.9% over the past three years while total shareholder loss over the past three years was 38%

Performance at Green Future Food Hydrocolloid Marine Science Company Limited (HKG:1084) has not been particularly rosy recently and shareholders will likely be holding CEO Kam Chung Chan and the board accountable for this. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 7th of June. The data we gathered below shows that CEO compensation looks acceptable for now.

Check out our latest analysis for Green Future Food Hydrocolloid Marine Science

How Does Total Compensation For Kam Chung Chan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Green Future Food Hydrocolloid Marine Science Company Limited has a market capitalization of HK$614m, and reported total annual CEO compensation of CN¥915k for the year to December 2023. That's a fairly small increase of 4.8% over the previous year. Notably, the salary which is CN¥899.0k, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Chemicals industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.4m. That is to say, Kam Chung Chan is paid under the industry median. What's more, Kam Chung Chan holds HK$120m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	CN¥899k	CN¥858k	98%
Other	CN¥16k	CN¥15k	2%
Total Compensation	CN¥915k	CN¥873k	100%

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. Green Future Food Hydrocolloid Marine Science has gone down a largely traditional route, paying Kam Chung Chan a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Green Future Food Hydrocolloid Marine Science Company Limited's Growth Numbers

Over the last three years, Green Future Food Hydrocolloid Marine Science Company Limited has shrunk its earnings per share by 3.9% per year. It saw its revenue drop 17% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Green Future Food Hydrocolloid Marine Science Company Limited Been A Good Investment?

With a total shareholder return of -38% over three years, Green Future Food Hydrocolloid Marine Science Company Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Kam Chung receives almost all of their compensation through a salary. 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Green Future Food Hydrocolloid Marine Science (1 is a bit unpleasant!) that you should be aware of before investing here.

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.