Should Shareholders Reconsider C&N Holdings Limited's (HKG:8430) CEO Compensation Package?

Key Insights

• C&N Holdings will host its Annual General Meeting on 28th of June
• Total pay for CEO Kang Lim Chua includes S$522.0k salary
• The overall pay is 767% above the industry average
• Over the past three years, C&N Holdings' EPS fell by 13% and over the past three years, the total loss to shareholders 93%

Shareholders will probably not be too impressed with the underwhelming results at C&N Holdings Limited (HKG:8430) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 28th of June. 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.

Check out our latest analysis for C&N Holdings

Comparing C&N Holdings Limited's CEO Compensation With The Industry

According to our data, C&N Holdings Limited has a market capitalization of HK$28m, and paid its CEO total annual compensation worth S$653k over the year to December 2023. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is S$522.0k, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Transportation industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was S$75k. Hence, we can conclude that Kang Lim Chua is remunerated higher than the industry median. Moreover, Kang Lim Chua also holds HK$533k worth of C&N Holdings stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	S$522k	S$501k	80%
Other	S$131k	S$150k	20%
Total Compensation	S$653k	S$651k	100%

On an industry level, roughly 72% of total compensation represents salary and 28% is other remuneration. C&N Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at C&N Holdings Limited's Growth Numbers

Over the last three years, C&N Holdings Limited has shrunk its earnings per share by 13% per year. It saw its revenue drop 11% over the last 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 C&N Holdings Limited Been A Good Investment?

With a total shareholder return of -93% over three years, C&N Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 3 warning signs for C&N Holdings that investors should think about before committing capital to this stock.

Important note: C&N Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com