Shareholders May Be Wary Of Increasing C&N Holdings Limited's (HKG:8430) CEO Compensation Package

C&N Holdings Limited (HKG:8430) has not performed well recently and CEO Kang Lim Chua will probably need to up their game. At the upcoming AGM on 28 June 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for C&N Holdings

Comparing C&N Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that C&N Holdings Limited has a market capitalization of HK$91m, and reported total annual CEO compensation of S$585k for the year to December 2020. We note that's a decrease of 9.0% compared to last year. We note that the salary portion, which stands at S$450.2k 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 S$41k. Accordingly, our analysis reveals that C&N Holdings Limited pays Kang Lim Chua north of the industry median. What's more, Kang Lim Chua holds HK$8.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	S$450k	S$504k	77%
Other	S$134k	S$139k	23%
Total Compensation	S$585k	S$643k	100%

On an industry level, around 80% of total compensation represents salary and 20% is other remuneration. Although there is a difference in how total compensation is set, C&N Holdings more or less reflects the market in terms of setting the salary. 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.

C&N Holdings Limited's Growth

Over the last three years, C&N Holdings Limited has shrunk its earnings per share by 35% per year. Its revenue is down 2.5% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has C&N Holdings Limited Been A Good Investment?

Few C&N Holdings Limited shareholders would feel satisfied with the return of -66% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 1 which is a bit concerning) in C&N Holdings we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. 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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