Shareholders May Be A Bit More Conservative With Cathay Media and Education Group Inc.'s (HKG:1981) CEO Compensation For Now

Key Insights

• Cathay Media and Education Group will host its Annual General Meeting on 30th of May
• CEO Shulin Pu's total compensation includes salary of CN¥1.20m
• The total compensation is similar to the average for the industry
• Cathay Media and Education Group's EPS declined by 107% over the past three years while total shareholder loss over the past three years was 82%

In the past three years, the share price of Cathay Media and Education Group Inc. (HKG:1981) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also poor, despite revenues growing. Shareholders will have a chance to take their concerns to the board at the next AGM on 30th of May and vote on resolutions including executive compensation, which studies show may have an impact on company performance. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

See our latest analysis for Cathay Media and Education Group

How Does Total Compensation For Shulin Pu Compare With Other Companies In The Industry?

Our data indicates that Cathay Media and Education Group Inc. has a market capitalization of HK$1.7b, and total annual CEO compensation was reported as CN¥1.4m for the year to December 2023. This was the same amount the CEO received in the prior year. In particular, the salary of CN¥1.20m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Entertainment industry with market capitalizations ranging from HK$781m to HK$3.1b, the reported median CEO total compensation was CN¥1.8m. So it looks like Cathay Media and Education Group compensates Shulin Pu in line with the median for the industry. What's more, Shulin Pu holds HK$1.2b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.2m	CN¥1.2m	86%
Other	CN¥200k	CN¥200k	14%
Total Compensation	CN¥1.4m	CN¥1.4m	100%

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. There isn't a significant difference between Cathay Media and Education Group and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Cathay Media and Education Group Inc.'s Growth

Over the last three years, Cathay Media and Education Group Inc. has shrunk its earnings per share by 107% per year. It achieved revenue growth of 16% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Cathay Media and Education Group Inc. Been A Good Investment?

Few Cathay Media and Education Group Inc. shareholders would feel satisfied with the return of -82% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. In 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 is in line with their expectations.

So you may want to check if insiders are buying Cathay Media and Education Group shares with their own money (free access).

Important note: Cathay Media and Education Group 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.