Increases to CEO Compensation Might Be Put On Hold For Now at MOS House Group Limited (HKG:1653)

In the past three years, the share price of MOS House Group Limited (HKG:1653) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 30 September 2022. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. 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 MOS House Group

Comparing MOS House Group Limited's CEO Compensation With The Industry

Our data indicates that MOS House Group Limited has a market capitalization of HK$72m, and total annual CEO compensation was reported as HK$2.9m for the year to March 2022. There was no change in the compensation compared to last year. In particular, the salary of HK$2.92m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.7m. Accordingly, our analysis reveals that MOS House Group Limited pays Simon Tso north of the industry median.

Component	2022	2021	Proportion (2022)
Salary	HK$2.9m	HK$2.9m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$2.9m	HK$2.9m	100%

On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. MOS House Group is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

MOS House Group Limited's Growth

MOS House Group Limited's earnings per share (EPS) grew 14% per year over the last three years. Its revenue is up 13% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 MOS House Group Limited Been A Good Investment?

The return of -64% over three years would not have pleased MOS House Group Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Simon receives almost all of their compensation through a salary. 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. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for MOS House Group (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.