Why We Think Peiport Holdings Ltd.'s (HKG:2885) CEO Compensation Is Not Excessive At All

Key Insights

• Peiport Holdings' Annual General Meeting to take place on 12th of June
• CEO Kwan Lik Wong's total compensation includes salary of HK$2.75m
• The total compensation is similar to the average for the industry
• Over the past three years, Peiport Holdings' EPS fell by 100% and over the past three years, the total shareholder return was 9.7%

The share price of Peiport Holdings Ltd. (HKG:2885) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 12th of June. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for Peiport Holdings

How Does Total Compensation For Kwan Lik Wong Compare With Other Companies In The Industry?

Our data indicates that Peiport Holdings Ltd. has a market capitalization of HK$174m, and total annual CEO compensation was reported as HK$3.1m for the year to December 2023. We note that's an increase of 21% above last year. We note that the salary portion, which stands at HK$2.75m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Hong Kong Electronic industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.4m. So it looks like Peiport Holdings compensates Kwan Lik Wong in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	HK$2.7m	HK$2.2m	90%
Other	HK$320k	HK$300k	10%
Total Compensation	HK$3.1m	HK$2.5m	100%

On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. According to our research, Peiport Holdings has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Peiport Holdings Ltd.'s Growth Numbers

Over the last three years, Peiport Holdings Ltd. has shrunk its earnings per share by 100% per year. It achieved revenue growth of 7.5% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Peiport Holdings Ltd. Been A Good Investment?

With a total shareholder return of 9.7% over three years, Peiport Holdings Ltd. has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is a bit concerning) in Peiport Holdings we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.