Here's Why Shareholders May Want To Be Cautious With Increasing Oriental Watch Holdings Limited's (HKG:398) CEO Pay Packet

Key Insights

• Oriental Watch Holdings to hold its Annual General Meeting on 28th of August
• CEO Dennis Yeung's total compensation includes salary of HK$4.69m
• The total compensation is 1,835% higher than the average for the industry
• Oriental Watch Holdings' total shareholder return over the past three years was 30% while its EPS grew by 6.0% over the past three years

Under the guidance of CEO Dennis Yeung, Oriental Watch Holdings Limited (HKG:398) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 28th of August. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Oriental Watch Holdings

Comparing Oriental Watch Holdings Limited's CEO Compensation With The Industry

According to our data, Oriental Watch Holdings Limited has a market capitalization of HK$1.6b, and paid its CEO total annual compensation worth HK$65m over the year to March 2024. We note that's a decrease of 8.5% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$4.7m.

On examining similar-sized companies in the Hong Kong Specialty Retail industry with market capitalizations between HK$779m and HK$3.1b, we discovered that the median CEO total compensation of that group was HK$3.4m. Hence, we can conclude that Dennis Yeung is remunerated higher than the industry median. Moreover, Dennis Yeung also holds HK$13m worth of Oriental Watch Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	HK$4.7m	HK$4.7m	7%
Other	HK$61m	HK$67m	93%
Total Compensation	HK$65m	HK$71m	100%

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. In Oriental Watch Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Oriental Watch Holdings Limited's Growth Numbers

Oriental Watch Holdings Limited's earnings per share (EPS) grew 6.0% per year over the last three years. It saw its revenue drop 1.8% over the last year.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Oriental Watch Holdings Limited Been A Good Investment?

Oriental Watch Holdings Limited has served shareholders reasonably well, with a total return of 30% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Oriental Watch Holdings that investors should be aware of in a dynamic business environment.

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.