It's Unlikely That The CEO Of Multifield International Holdings Limited (HKG:898) Will See A Huge Pay Rise This Year

Key Insights

• Multifield International Holdings' Annual General Meeting to take place on 30th of May
• CEO Michael Lau's total compensation includes salary of HK$2.25m
• The total compensation is similar to the average for the industry
• Over the past three years, Multifield International Holdings' EPS grew by 69% and over the past three years, the total loss to shareholders 20%

In the past three years, the share price of Multifield International Holdings Limited (HKG:898) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 30th of May could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Multifield International Holdings

How Does Total Compensation For Michael Lau Compare With Other Companies In The Industry?

Our data indicates that Multifield International Holdings Limited has a market capitalization of HK$669m, and total annual CEO compensation was reported as HK$2.3m for the year to December 2023. We note that's a small decrease of 3.8% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$2.3m.

On comparing similar-sized companies in the Hong Kong Real Estate industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.8m. From this we gather that Michael Lau is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	HK$2.3m	HK$2.3m	100%
Other	-	-	-
Total Compensation	HK$2.3m	HK$2.3m	100%

On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. At the company level, Multifield International Holdings pays Michael Lau solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Multifield International Holdings Limited's Growth

Multifield International Holdings Limited has seen its earnings per share (EPS) increase by 69% a year over the past three years. Its revenue is up 3.6% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Multifield International Holdings Limited Been A Good Investment?

Given the total shareholder loss of 20% over three years, many shareholders in Multifield International Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Multifield International Holdings pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At 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 will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for Multifield International Holdings you should be aware of, and 1 of them shouldn't be ignored.

Important note: Multifield International 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.