We Discuss Why MOS House Group Limited's (HKG:1653) CEO Compensation May Be Closely Reviewed

Key Insights

• MOS House Group will host its Annual General Meeting on 12th of September
• Total pay for CEO Simon Tso includes HK$2.90m salary
• The overall pay is 69% above the industry average
• Over the past three years, MOS House Group's EPS fell by 44% and over the past three years, the total loss to shareholders 10%

Shareholders will probably not be too impressed with the underwhelming results at MOS House Group Limited (HKG:1653) recently. At the upcoming AGM on 12th of September, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for MOS House Group

How Does Total Compensation For Simon Tso Compare With Other Companies In The Industry?

According to our data, MOS House Group Limited has a market capitalization of HK$85m, and paid its CEO total annual compensation worth HK$2.9m over the year to March 2024. We note that's a decrease of 16% compared to last year. Notably, the salary which is HK$2.90m, represents most of the total compensation being paid.

On comparing similar-sized companies in the Hong Kong Specialty Retail industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.7m. This suggests that Simon Tso is paid more than the median for the industry. What's more, Simon Tso holds HK$2.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	HK$2.9m	HK$2.9m	99%
Other	HK$18k	HK$569k	1%
Total Compensation	HK$2.9m	HK$3.5m	100%

Talking in terms of the industry, salary represented approximately 90% of total compensation out of all the companies we analyzed, while other remuneration made up 10% of the pie. 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 dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at MOS House Group Limited's Growth Numbers

Over the last three years, MOS House Group Limited has shrunk its earnings per share by 44% per year. Its revenue is down 20% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has MOS House Group Limited Been A Good Investment?

Given the total shareholder loss of 10% over three years, many shareholders in MOS House Group Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

MOS House Group pays its CEO a majority of compensation through a salary. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for MOS House Group that you should be aware of before investing.

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.