Here's Why Shareholders May Want To Be Cautious With Increasing AMS Public Transport Holdings Limited's (HKG:77) CEO Pay Packet

In the past three years, the share price of AMS Public Transport Holdings Limited (HKG:77) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 26 August 2021. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for AMS Public Transport Holdings

How Does Total Compensation For Man Chun Chan Compare With Other Companies In The Industry?

According to our data, AMS Public Transport Holdings Limited has a market capitalization of HK$190m, and paid its CEO total annual compensation worth HK$4.4m over the year to March 2021. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at HK$3.95m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$266k. Accordingly, our analysis reveals that AMS Public Transport Holdings Limited pays Man Chun Chan north of the industry median. Furthermore, Man Chun Chan directly owns HK$2.6m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	HK$4.0m	HK$3.9m	91%
Other	HK$408k	HK$408k	9%
Total Compensation	HK$4.4m	HK$4.4m	100%

On an industry level, roughly 81% of total compensation represents salary and 19% is other remuneration. According to our research, AMS Public Transport Holdings has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

AMS Public Transport Holdings Limited's Growth

Over the past three years, AMS Public Transport Holdings Limited has seen its earnings per share (EPS) grow by 41% per year. It saw its revenue drop 17% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 AMS Public Transport Holdings Limited Been A Good Investment?

Few AMS Public Transport Holdings Limited shareholders would feel satisfied with the return of -30% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 4 warning signs for AMS Public Transport Holdings that investors should think about before committing capital to this stock.

Switching gears from AMS Public Transport 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.
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