Stock Analysis

Here's Why It's Unlikely That G.A. Holdings Limited's (HKG:8126) CEO Will See A Pay Rise This Year

SEHK:8126
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Key Insights

  • G.A. Holdings' Annual General Meeting to take place on 20th of June
  • Total pay for CEO Choong Yew Choy includes HK$1.52m salary
  • The total compensation is similar to the average for the industry
  • Over the past three years, G.A. Holdings' EPS fell by 57% and over the past three years, the total loss to shareholders 52%

The results at G.A. Holdings Limited (HKG:8126) have been quite disappointing recently and CEO Choong Yew Choy bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 20th 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 G.A. Holdings

How Does Total Compensation For Choong Yew Choy Compare With Other Companies In The Industry?

According to our data, G.A. Holdings Limited has a market capitalization of HK$55m, and paid its CEO total annual compensation worth HK$1.5m over the year to December 2023. That's a slight decrease of 4.4% on the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$1.5m.

For comparison, other companies in the Hong Kong Retail Distributors industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.6m. This suggests that G.A. Holdings remunerates its CEO largely in line with the industry average.

Component20232022Proportion (2023)
Salary HK$1.5m HK$1.6m 100%
Other - - -
Total CompensationHK$1.5m HK$1.6m100%

On an industry level, around 94% of total compensation represents salary and 6% is other remuneration. On a company level, G.A. Holdings prefers to reward its CEO through a salary, opting not to pay Choong Yew Choy through 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.

ceo-compensation
SEHK:8126 CEO Compensation June 13th 2024

G.A. Holdings Limited's Growth

Over the last three years, G.A. Holdings Limited has shrunk its earnings per share by 57% per year. Its revenue is down 9.7% 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. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has G.A. Holdings Limited Been A Good Investment?

Few G.A. Holdings Limited shareholders would feel satisfied with the return of -52% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

G.A. Holdings rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 5 warning signs for G.A. Holdings (3 can't be ignored!) that you should be aware of before investing here.

Important note: G.A. Holdings 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.

Valuation is complex, but we're helping make it simple.

Find out whether G.A. Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.