Increases to Grand Power Logistics Group Limited's (HKG:8489) CEO Compensation Might Cool off for now

Key Insights

• Grand Power Logistics Group's Annual General Meeting to take place on 31st of May
• Salary of HK$3.00m is part of CEO Ricky Chiu's total remuneration
• The overall pay is 158% above the industry average
• Grand Power Logistics Group's three-year loss to shareholders was 74% while its EPS was down 103% over the past three years

In the past three years, the share price of Grand Power Logistics Group Limited (HKG:8489) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 31st of May, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

View our latest analysis for Grand Power Logistics Group

How Does Total Compensation For Ricky Chiu Compare With Other Companies In The Industry?

Our data indicates that Grand Power Logistics Group Limited has a market capitalization of HK$50m, and total annual CEO compensation was reported as HK$3.3m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is HK$3.00m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Logistics industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.3m. Hence, we can conclude that Ricky Chiu is remunerated higher than the industry median. What's more, Ricky Chiu holds HK$19m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	HK$3.0m	HK$3.0m	91%
Other	HK$288k	HK$238k	9%
Total Compensation	HK$3.3m	HK$3.2m	100%

On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. It's interesting to note that Grand Power Logistics Group pays out a greater portion of remuneration through salary, compared to the industry. 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.

A Look at Grand Power Logistics Group Limited's Growth Numbers

Grand Power Logistics Group Limited has reduced its earnings per share by 103% a year over the last three years. It achieved revenue growth of 22% over the last year.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Grand Power Logistics Group Limited Been A Good Investment?

The return of -74% over three years would not have pleased Grand Power Logistics Group Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. 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 Grand Power Logistics Group that investors should think about before committing capital to this stock.

Important note: Grand Power Logistics Group 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.