It's Probably Less Likely That Mobvista Inc.'s (HKG:1860) CEO Will See A Huge Pay Rise This Year

Key Insights

• Mobvista to hold its Annual General Meeting on 18th of June
• Total pay for CEO Clement Cao includes US$232.0k salary
• The total compensation is similar to the average for the industry
• Mobvista's three-year loss to shareholders was 68% while its EPS grew by 82% over the past three years

In the past three years, the share price of Mobvista Inc. (HKG:1860) has struggled to grow and now shareholders are sitting on a loss. 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 18th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. 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 Mobvista

How Does Total Compensation For Clement Cao Compare With Other Companies In The Industry?

According to our data, Mobvista Inc. has a market capitalization of HK$4.3b, and paid its CEO total annual compensation worth US$380k over the year to December 2023. We note that's a decrease of 28% compared to last year. We note that the salary portion, which stands at US$232.0k constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the Hong Kong Media industry with market capitalizations between HK$1.6b and HK$6.2b, we discovered that the median CEO total compensation of that group was US$348k. This suggests that Mobvista remunerates its CEO largely in line with the industry average. Moreover, Clement Cao also holds HK$8.1m worth of Mobvista stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$232k	US$287k	61%
Other	US$148k	US$242k	39%
Total Compensation	US$380k	US$529k	100%

On an industry level, roughly 86% of total compensation represents salary and 14% is other remuneration. In Mobvista's case, non-salary compensation represents a greater slice of total remuneration, 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.

Mobvista Inc.'s Growth

Over the past three years, Mobvista Inc. has seen its earnings per share (EPS) grow by 82% per year. It achieved revenue growth of 23% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Mobvista Inc. Been A Good Investment?

Few Mobvista Inc. shareholders would feel satisfied with the return of -68% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Mobvista that investors should think about before committing capital to this stock.

Important note: Mobvista 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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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.