We Discuss Why Asia Standard International Group Limited's (HKG:129) CEO Compensation May Be Closely Reviewed

Asia Standard International Group Limited (HKG:129) has not performed well recently and CEO Richard Poon 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 27 August 2021. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Asia Standard International Group

Comparing Asia Standard International Group Limited's CEO Compensation With the industry

At the time of writing, our data shows that Asia Standard International Group Limited has a market capitalization of HK$1.4b, and reported total annual CEO compensation of HK$26m for the year to March 2021. That's just a smallish increase of 5.1% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$1.3m.

For comparison, other companies in the same industry with market capitalizations ranging between HK$779m and HK$3.1b had a median total CEO compensation of HK$2.8m. This suggests that Richard Poon is paid more than the median for the industry. Moreover, Richard Poon also holds HK$1.3m worth of Asia Standard International Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	HK$1.3m	HK$1.3m	5%
Other	HK$25m	HK$24m	95%
Total Compensation	HK$26m	HK$25m	100%

Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. Asia Standard International Group has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. 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 Asia Standard International Group Limited's Growth Numbers

Over the last three years, Asia Standard International Group Limited has shrunk its earnings per share by 2.6% per year. Its revenue is up 3.6% over the last year.

A lack of EPS improvement is not good to see. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Asia Standard International Group Limited Been A Good Investment?

With a total shareholder return of -37% over three years, Asia Standard International Group Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Asia Standard International Group primarily uses non-salary benefits to reward its CEO. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Asia Standard International Group (2 can't be ignored!) 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.
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