Here's Why It's Unlikely That CSMall Group Limited's (HKG:1815) CEO Will See A Pay Rise This Year

Key Insights

• CSMall Group to hold its Annual General Meeting on 14th of June
• Total pay for CEO He Chen includes CN¥1.42m salary
• The overall pay is comparable to the industry average
• CSMall Group's EPS declined by 37% over the past three years while total shareholder loss over the past three years was 59%

Shareholders will probably not be too impressed with the underwhelming results at CSMall Group Limited (HKG:1815) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 14th 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for CSMall Group

How Does Total Compensation For He Chen Compare With Other Companies In The Industry?

At the time of writing, our data shows that CSMall Group Limited has a market capitalization of HK$340m, and reported total annual CEO compensation of CN¥1.4m for the year to December 2023. That's just a smallish increase of 4.9% on last year. Notably, the salary which is CN¥1.42m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Specialty Retail industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.6m. From this we gather that He Chen is paid around the median for CEOs in the industry. Furthermore, He Chen directly owns HK$5.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.4m	CN¥1.4m	99%
Other	CN¥14k	CN¥14k	1%
Total Compensation	CN¥1.4m	CN¥1.4m	100%

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. CSMall 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.

CSMall Group Limited's Growth

Over the last three years, CSMall Group Limited has shrunk its earnings per share by 37% per year. Its revenue is down 72% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last 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 CSMall Group Limited Been A Good Investment?

The return of -59% over three years would not have pleased CSMall Group Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

He receives almost all of their compensation through a salary. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for CSMall Group (1 shouldn't be ignored!) that you should be aware of before investing here.

Switching gears from CSMall Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.