Here's Why It's Unlikely That Nanyang Holdings Limited's (HKG:212) CEO Will See A Pay Rise This Year

Key Insights

• Nanyang Holdings' Annual General Meeting to take place on 21st of May
• CEO Lincoln Yung's total compensation includes salary of HK$5.92m
• The overall pay is 430% above the industry average
• Over the past three years, Nanyang Holdings' EPS fell by 95% and over the past three years, the total loss to shareholders 24%

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Nanyang Holdings Limited (HKG:212) has not performed well recently and CEO Lincoln Yung will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 21st of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Nanyang Holdings

Comparing Nanyang Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Nanyang Holdings Limited has a market capitalization of HK$883m, and reported total annual CEO compensation of HK$8.6m for the year to December 2024. That is, the compensation was roughly the same as last year. Notably, the salary which is HK$5.92m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Real Estate industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.6m. Accordingly, our analysis reveals that Nanyang Holdings Limited pays Lincoln Yung north of the industry median. Furthermore, Lincoln Yung directly owns HK$62m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	HK$5.9m	HK$5.9m	68%
Other	HK$2.7m	HK$2.9m	32%
Total Compensation	HK$8.6m	HK$8.8m	100%

Speaking on an industry level, nearly 82% of total compensation represents salary, while the remainder of 18% is other remuneration. Nanyang Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Nanyang Holdings Limited's Growth Numbers

Nanyang Holdings Limited has reduced its earnings per share by 95% a year over the last three years. Its revenue is up 1.3% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Nanyang Holdings Limited Been A Good Investment?

Since shareholders would have lost about 24% over three years, some Nanyang Holdings Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Nanyang Holdings (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: Nanyang Holdings 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.