Should Shareholders Reconsider Great Harvest Maeta Group Holdings Limited's (HKG:3683) CEO Compensation Package?

Shareholders will probably not be too impressed with the underwhelming results at Great Harvest Maeta Group Holdings Limited (HKG:3683) recently. At the upcoming AGM on 18 August 2021, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Great Harvest Maeta Group Holdings

How Does Total Compensation For Linda Lam Compare With Other Companies In The Industry?

Our data indicates that Great Harvest Maeta Group Holdings Limited has a market capitalization of HK$895m, and total annual CEO compensation was reported as US$210k for the year to March 2021. There was no change in the compensation compared to last year. We note that the salary portion, which stands at US$208.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was US$217k. From this we gather that Linda Lam is paid around the median for CEOs in the industry. Furthermore, Linda Lam directly owns HK$11m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	US$208k	US$208k	99%
Other	US$2.0k	US$2.0k	1%
Total Compensation	US$210k	US$210k	100%

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Great Harvest Maeta Group Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Great Harvest Maeta Group Holdings Limited's Growth

Over the last three years, Great Harvest Maeta Group Holdings Limited has shrunk its earnings per share by 80% per year. It achieved revenue growth of 1.9% over the last year.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Great Harvest Maeta Group Holdings Limited Been A Good Investment?

Few Great Harvest Maeta Group Holdings Limited shareholders would feel satisfied with the return of -58% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Linda receives almost all of their compensation through a salary. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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 1 warning sign for Great Harvest Maeta 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.
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