It's Unlikely That Shareholders Will Increase Wharf Real Estate Investment Company Limited's (HKG:1997) Compensation By Much This Year

The disappointing performance at Wharf Real Estate Investment Company Limited (HKG:1997) will make some shareholders rather disheartened. The next AGM coming up on 06 May 2021 will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

View our latest analysis for Wharf Real Estate Investment

Comparing Wharf Real Estate Investment Company Limited's CEO Compensation With the industry

According to our data, Wharf Real Estate Investment Company Limited has a market capitalization of HK$136b, and paid its CEO total annual compensation worth HK$12m over the year to December 2020. Notably, that's a decrease of 12% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$3.5m.

On comparing similar companies in the industry with market capitalizations above HK$62b, we found that the median total CEO compensation was HK$21m. Accordingly, Wharf Real Estate Investment pays its CEO under the industry median. Moreover, Stephen Ng also holds HK$66m worth of Wharf Real Estate Investment stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	HK$3.5m	HK$3.5m	30%
Other	HK$8.1m	HK$9.7m	70%
Total Compensation	HK$12m	HK$13m	100%

On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. Wharf Real Estate Investment pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Wharf Real Estate Investment Company Limited's Growth

Wharf Real Estate Investment Company Limited has reduced its earnings per share by 87% a year over the last three years. Its revenue is down 3.2% over the previous year.

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. 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 Wharf Real Estate Investment Company Limited Been A Good Investment?

Given the total shareholder loss of 7.9% over three years, many shareholders in Wharf Real Estate Investment Company Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Wharf Real Estate Investment that investors should look into moving forward.

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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