Shareholders Will Probably Hold Off On Increasing Wong's International Holdings Limited's (HKG:99) CEO Compensation For The Time Being

Key Insights

• Wong's International Holdings will host its Annual General Meeting on 5th of June
• CEO Ben Wong's total compensation includes salary of HK$4.59m
• The total compensation is 215% higher than the average for the industry
• Over the past three years, Wong's International Holdings' EPS grew by 113% and over the past three years, the total loss to shareholders 37%

In the past three years, the share price of Wong's International Holdings Limited (HKG:99) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. 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 try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. 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 Wong's International Holdings

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

According to our data, Wong's International Holdings Limited has a market capitalization of HK$665m, and paid its CEO total annual compensation worth HK$7.5m over the year to December 2023. Notably, that's an increase of 30% over the year before. In particular, the salary of HK$4.59m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Electronic industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.4m. Accordingly, our analysis reveals that Wong's International Holdings Limited pays Ben Wong north of the industry median. Furthermore, Ben Wong directly owns HK$243m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	HK$4.6m	HK$4.5m	61%
Other	HK$2.9m	HK$1.3m	39%
Total Compensation	HK$7.5m	HK$5.8m	100%

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. In Wong's International Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader 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.

Wong's International Holdings Limited's Growth

Wong's International Holdings Limited has seen its earnings per share (EPS) increase by 113% a year over the past three years. It saw its revenue drop 8.1% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Wong's International Holdings Limited Been A Good Investment?

With a total shareholder return of -37% over three years, Wong's International Holdings Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. 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.

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. That's why we did our research, and identified 3 warning signs for Wong's International Holdings (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Wong's International Holdings, 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.