Here's Why Cathay Group Holdings Inc.'s (HKG:1981) CEO Compensation Is The Least Of Shareholders Concerns
Key Insights
- Cathay Group Holdings to hold its Annual General Meeting on 30th of May
- Salary of CN¥1.20m is part of CEO Shulin Pu's total remuneration
- Total compensation is 54% below industry average
- Cathay Group Holdings' total shareholder return over the past three years was 61% while its EPS was down 5.4% over the past three years
Shareholders may be wondering what CEO Shulin Pu plans to do to improve the less than great performance at Cathay Group Holdings Inc. (HKG:1981) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 30th of May. 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.
See our latest analysis for Cathay Group Holdings
Comparing Cathay Group Holdings Inc.'s CEO Compensation With The Industry
According to our data, Cathay Group Holdings Inc. has a market capitalization of HK$2.1b, and paid its CEO total annual compensation worth CN¥1.4m over the year to December 2024. There was no change in the compensation compared to last year. Notably, the salary which is CN¥1.20m, represents most of the total compensation being paid.
On examining similar-sized companies in the Hong Kong Entertainment industry with market capitalizations between HK$783m and HK$3.1b, we discovered that the median CEO total compensation of that group was CN¥3.0m. Accordingly, Cathay Group Holdings pays its CEO under the industry median. Moreover, Shulin Pu also holds HK$1.6b worth of Cathay Group Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | CN¥1.2m | CN¥1.2m | 86% |
| Other | CN¥200k | CN¥200k | 14% |
| Total Compensation | CN¥1.4m | CN¥1.4m | 100% |
Talking in terms of the industry, salary represented approximately 85% of total compensation out of all the companies we analyzed, while other remuneration made up 15% of the pie. Although there is a difference in how total compensation is set, Cathay Group Holdings more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Cathay Group Holdings Inc.'s Growth
Over the last three years, Cathay Group Holdings Inc. has shrunk its earnings per share by 5.4% per year. In the last year, its revenue is up 3.1%.
Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Cathay Group Holdings Inc. Been A Good Investment?
Boasting a total shareholder return of 61% over three years, Cathay Group Holdings Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean these strong returns may not continue. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Cathay Group Holdings (1 is a bit concerning!) that you should be aware of before investing here.
Switching gears from Cathay Group Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
Valuation is complex, but we're here to simplify it.
Discover if Cathay Group Holdings might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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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.