Here's Why Come Sure Group (Holdings) Limited's (HKG:794) CEO Compensation Is The Least Of Shareholders Concerns

By
Simply Wall St
Published
August 30, 2021
SEHK:794
Source: Shutterstock

Shareholders may be wondering what CEO Wa Pan Chong plans to do to improve the less than great performance at Come Sure Group (Holdings) Limited (HKG:794) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 06 September 2021. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for Come Sure Group (Holdings)

How Does Total Compensation For Wa Pan Chong Compare With Other Companies In The Industry?

At the time of writing, our data shows that Come Sure Group (Holdings) Limited has a market capitalization of HK$210m, and reported total annual CEO compensation of HK$2.4m for the year to March 2021. We note that's a decrease of 20% compared to last year. In particular, the salary of HK$2.34m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$3.6m. Accordingly, Come Sure Group (Holdings) pays its CEO under the industry median.

Component20212020Proportion (2021)
Salary HK$2.3m HK$2.3m 99%
Other HK$18k HK$618k 1%
Total CompensationHK$2.4m HK$3.0m100%

Speaking on an industry level, nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. Come Sure Group (Holdings) has gone down a largely traditional route, paying Wa Pan Chong a high salary, giving it preference over 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.

ceo-compensation
SEHK:794 CEO Compensation August 30th 2021

A Look at Come Sure Group (Holdings) Limited's Growth Numbers

Over the last three years, Come Sure Group (Holdings) Limited has shrunk its earnings per share by 33% per year. It achieved revenue growth of 19% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Come Sure Group (Holdings) Limited Been A Good Investment?

Given the total shareholder loss of 18% over three years, many shareholders in Come Sure Group (Holdings) Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Wa Pan receives almost all of their compensation through a salary. The fact that shareholders are sitting on a loss is certainly disheartening. The downward trend in share price performance may be attributable to the the fact that earnings growth has gone backwards. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in Come Sure Group (Holdings) we think you should know about.

Important note: Come Sure Group (Holdings) 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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