This Is Why Shareholders May Want To Hold Back On A Pay Rise For Netjoy Holdings Limited's (HKG:2131) CEO

Key Insights

• Netjoy Holdings' Annual General Meeting to take place on 24th of June
• CEO Chen Wang's total compensation includes salary of CN¥699.0k
• The overall pay is 49% below the industry average
• Netjoy Holdings' three-year loss to shareholders was 90% while its EPS was down 59% over the past three years

Performance at Netjoy Holdings Limited (HKG:2131) has not been particularly rosy recently and shareholders will likely be holding CEO Chen Wang and the board accountable for this. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 24th of June. The data we gathered below shows that CEO compensation looks acceptable for now.

View our latest analysis for Netjoy Holdings

Comparing Netjoy Holdings Limited's CEO Compensation With The Industry

According to our data, Netjoy Holdings Limited has a market capitalization of HK$474m, and paid its CEO total annual compensation worth CN¥918k over the year to December 2023. That's a notable decrease of 9.6% on last year. In particular, the salary of CN¥699.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Media industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.8m. In other words, Netjoy Holdings pays its CEO lower than the industry median. Moreover, Chen Wang also holds HK$71m worth of Netjoy Holdings 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	CN¥699k	CN¥639k	76%
Other	CN¥219k	CN¥377k	24%
Total Compensation	CN¥918k	CN¥1.0m	100%

Speaking on an industry level, nearly 86% of total compensation represents salary, while the remainder of 14% is other remuneration. Netjoy Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Netjoy Holdings Limited's Growth Numbers

Over the last three years, Netjoy Holdings Limited has shrunk its earnings per share by 59% per year. In the last year, its revenue is down 9.1%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Netjoy Holdings Limited Been A Good Investment?

The return of -90% over three years would not have pleased Netjoy Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Netjoy Holdings (1 is potentially serious!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com