It's Probably Less Likely That Reliance Global Holdings Limited's (HKG:723) CEO Will See A Huge Pay Rise This Year

In the past three years, shareholders of Reliance Global Holdings Limited (HKG:723) have seen a loss on their investment. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 28 September 2021. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Reliance Global Holdings

Comparing Reliance Global Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that Reliance Global Holdings Limited has a market capitalization of HK$182m, and reported total annual CEO compensation of HK$1.1m for the year to March 2021. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at HK$1.04m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.1m. So it looks like Reliance Global Holdings compensates Ming Wai Lai in line with the median for the industry.

Component	2021	2020	Proportion (2021)
Salary	HK$1.0m	HK$1.0m	95%
Other	HK$52k	HK$50k	5%
Total Compensation	HK$1.1m	HK$1.1m	100%

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. Reliance Global Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to 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.

A Look at Reliance Global Holdings Limited's Growth Numbers

Over the past three years, Reliance Global Holdings Limited has seen its earnings per share (EPS) grow by 14% per year. In the last year, its revenue is up 36%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Reliance Global Holdings Limited Been A Good Investment?

With a three year total loss of 9.1% for the shareholders, Reliance Global Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Ming Wai receives almost all of their compensation through a salary. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 4 warning signs for Reliance Global Holdings that investors should think about before committing capital to this stock.

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.
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