Should Shareholders Reconsider The Wharf (Holdings) Limited's (HKG:4) CEO Compensation Package?

Key Insights

• Wharf (Holdings) to hold its Annual General Meeting on 13th of May
• CEO Stephen Ng's total compensation includes salary of HK$5.78m
• The overall pay is comparable to the industry average
• Wharf (Holdings)'s three-year loss to shareholders was 4.7% while its EPS was down 112% over the past three years

We've discovered 1 warning sign about Wharf (Holdings). View them for free.

The Wharf (Holdings) Limited (HKG:4) has not performed well recently and CEO Stephen Ng will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 13th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Wharf (Holdings)

Comparing The Wharf (Holdings) Limited's CEO Compensation With The Industry

At the time of writing, our data shows that The Wharf (Holdings) Limited has a market capitalization of HK$59b, and reported total annual CEO compensation of HK$15m for the year to December 2024. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$5.8m.

On comparing similar companies from the Hong Kong Real Estate industry with market caps ranging from HK$31b to HK$93b, we found that the median CEO total compensation was HK$12m. From this we gather that Stephen Ng is paid around the median for CEOs in the industry. Furthermore, Stephen Ng directly owns HK$81m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	HK$5.8m	HK$5.6m	38%
Other	HK$9.4m	HK$9.4m	62%
Total Compensation	HK$15m	HK$15m	100%

Speaking on an industry level, nearly 82% of total compensation represents salary, while the remainder of 18% is other remuneration. In Wharf (Holdings)'s case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at The Wharf (Holdings) Limited's Growth Numbers

Over the last three years, The Wharf (Holdings) Limited has shrunk its earnings per share by 112% per year. It saw its revenue drop 36% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has The Wharf (Holdings) Limited Been A Good Investment?

Given the total shareholder loss of 4.7% over three years, many shareholders in The Wharf (Holdings) Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

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, the board will get the chance to explain the steps it plans to take to improve business performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Wharf (Holdings) that investors should be aware of in a dynamic business environment.

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.