We Think Some Shareholders May Hesitate To Increase Integrated Waste Solutions Group Holdings Limited's (HKG:923) CEO Compensation

Shareholders of Integrated Waste Solutions Group Holdings Limited (HKG:923) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 27 August 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Integrated Waste Solutions Group Holdings

Comparing Integrated Waste Solutions Group Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that Integrated Waste Solutions Group Holdings Limited has a market capitalization of HK$299m, and reported total annual CEO compensation of HK$3.3m for the year to March 2021. This means that the compensation hasn't changed much from last year. Notably, the salary which is HK$2.46m, represents most of the total compensation being paid.

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. Hence, we can conclude that King Sang Lam is remunerated higher than the industry median.

Component	2021	2020	Proportion (2021)
Salary	HK$2.5m	HK$2.4m	73%
Other	HK$890k	HK$888k	27%
Total Compensation	HK$3.3m	HK$3.3m	100%

Talking in terms of the industry, salary represented approximately 82% of total compensation out of all the companies we analyzed, while other remuneration made up 18% of the pie. It's interesting to note that Integrated Waste Solutions Group Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Integrated Waste Solutions Group Holdings Limited's Growth

Over the past three years, Integrated Waste Solutions Group Holdings Limited has seen its earnings per share (EPS) grow by 21% per year. It saw its revenue drop 51% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Integrated Waste Solutions Group Holdings Limited Been A Good Investment?

Few Integrated Waste Solutions Group Holdings Limited shareholders would feel satisfied with the return of -39% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Integrated Waste Solutions Group Holdings that investors should be aware of in a dynamic business environment.

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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