Increases to CEO Compensation Might Be Put On Hold For Now at Mulsanne Group Holding Limited (HKG:1817)

Key Insights

• Mulsanne Group Holding to hold its Annual General Meeting on 5th of June
• Total pay for CEO Yong Yu includes CN¥2.98m salary
• Total compensation is 257% above industry average
• Mulsanne Group Holding's three-year loss to shareholders was 80% while its EPS grew by 102% over the past three years

In the past three years, the share price of Mulsanne Group Holding Limited (HKG:1817) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 5th of June. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Mulsanne Group Holding

How Does Total Compensation For Yong Yu Compare With Other Companies In The Industry?

Our data indicates that Mulsanne Group Holding Limited has a market capitalization of HK$1.1b, and total annual CEO compensation was reported as CN¥6.0m for the year to December 2023. We note that's an increase of 9.7% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥3.0m.

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 CN¥1.7m. This suggests that Yong Yu is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	CN¥3.0m	CN¥1.3m	50%
Other	CN¥3.0m	CN¥4.2m	50%
Total Compensation	CN¥6.0m	CN¥5.5m	100%

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. In Mulsanne Group Holding's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Mulsanne Group Holding Limited's Growth Numbers

Mulsanne Group Holding Limited's earnings per share (EPS) grew 102% per year over the last three years. Revenue was pretty flat on last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Mulsanne Group Holding Limited Been A Good Investment?

Few Mulsanne Group Holding Limited shareholders would feel satisfied with the return of -80% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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.

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 Mulsanne Group Holding that investors should think about before committing capital to this stock.

Important note: Mulsanne Group Holding is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.