Here's Why Shareholders Should Examine Symphony Holdings Limited's (HKG:1223) CEO Compensation Package More Closely

Key Insights

• Symphony Holdings will host its Annual General Meeting on 28th of June
• Salary of HK$2.40m is part of CEO Tony Cheng's total remuneration
• The overall pay is comparable to the industry average
• Symphony Holdings' three-year loss to shareholders was 8.6% while its EPS was down 27% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Symphony Holdings Limited (HKG:1223) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 28th of June. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Symphony Holdings

Comparing Symphony Holdings Limited's CEO Compensation With The Industry

Our data indicates that Symphony Holdings Limited has a market capitalization of HK$2.4b, and total annual CEO compensation was reported as HK$2.6m for the year to December 2023. This was the same as last year. We note that the salary portion, which stands at HK$2.40m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Specialty Retail industry with market capitalizations ranging from HK$1.6b to HK$6.2b, the reported median CEO total compensation was HK$2.5m. So it looks like Symphony Holdings compensates Tony Cheng in line with the median for the industry. Moreover, Tony Cheng also holds HK$1.0b worth of Symphony Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	HK$2.4m	HK$2.4m	92%
Other	HK$218k	HK$218k	8%
Total Compensation	HK$2.6m	HK$2.6m	100%

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. There isn't a significant difference between Symphony Holdings and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Symphony Holdings Limited's Growth

Over the last three years, Symphony Holdings Limited has shrunk its earnings per share by 27% per year. Its revenue is up 9.2% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Symphony Holdings Limited Been A Good Investment?

Since shareholders would have lost about 8.6% over three years, some Symphony Holdings Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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. That's why we did some digging and identified 1 warning sign for Symphony Holdings that investors should think about before committing capital to this stock.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com