We Think Shareholders Are Less Likely To Approve A Large Pay Rise For A & S Group (Holdings) Limited's (HKG:1737) CEO For Now

Key Insights

• A & S Group (Holdings)'s Annual General Meeting to take place on 9th of September
• Total pay for CEO Albert Chiu includes HK$1.89m salary
• The total compensation is 68% higher than the average for the industry
• A & S Group (Holdings)'s three-year loss to shareholders was 7.5% while its EPS was down 24% over the past three years

In the past three years, shareholders of A & S Group (Holdings) Limited (HKG:1737) have seen a loss on their investment. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. Shareholders will have a chance to take their concerns to the board at the next AGM on 9th of September and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

Check out our latest analysis for A & S Group (Holdings)

Comparing A & S Group (Holdings) Limited's CEO Compensation With The Industry

At the time of writing, our data shows that A & S Group (Holdings) Limited has a market capitalization of HK$126m, and reported total annual CEO compensation of HK$2.2m for the year to March 2024. This means that the compensation hasn't changed much from last year. In particular, the salary of HK$1.89m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Logistics industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.3m. This suggests that Albert Chiu is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	HK$1.9m	HK$1.8m	87%
Other	HK$293k	HK$416k	13%
Total Compensation	HK$2.2m	HK$2.3m	100%

On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. A & S Group (Holdings) pays out 87% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A & S Group (Holdings) Limited's Growth

Over the last three years, A & S Group (Holdings) Limited has shrunk its earnings per share by 24% per year. In the last year, its revenue is up 28%.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has A & S Group (Holdings) Limited Been A Good Investment?

With a three year total loss of 7.5% for the shareholders, A & S Group (Holdings) Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

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 2 warning signs for A & S Group (Holdings) that you should be aware of before investing.

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.