Key Insights
- Tailam Tech Construction Holdings will host its Annual General Meeting on 7th of June
- Total pay for CEO Alice Wong includes CN¥1.88m salary
- The overall pay is 143% above the industry average
- Tailam Tech Construction Holdings' EPS declined by 77% over the past three years while total shareholder loss over the past three years was 65%
Shareholders will probably not be too impressed with the underwhelming results at Tailam Tech Construction Holdings Limited (HKG:6193) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 7th of June. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.
Check out our latest analysis for Tailam Tech Construction Holdings
Comparing Tailam Tech Construction Holdings Limited's CEO Compensation With The Industry
At the time of writing, our data shows that Tailam Tech Construction Holdings Limited has a market capitalization of HK$84m, and reported total annual CEO compensation of CN¥2.0m for the year to December 2023. This means that the compensation hasn't changed much from last year. In particular, the salary of CN¥1.88m, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the Hong Kong Basic Materials industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥822k. Hence, we can conclude that Alice Wong is remunerated higher than the industry median. Furthermore, Alice Wong directly owns HK$48m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2023 | 2022 | Proportion (2023) |
| Salary | CN¥1.9m | CN¥1.8m | 94% |
| Other | CN¥126k | CN¥173k | 6% |
| Total Compensation | CN¥2.0m | CN¥1.9m | 100% |
Talking in terms of the industry, salary represented approximately 87% of total compensation out of all the companies we analyzed, while other remuneration made up 13% of the pie. There isn't a significant difference between Tailam Tech Construction Holdings and the broader market, in terms of salary allocation in the overall compensation package. 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 Tailam Tech Construction Holdings Limited's Growth Numbers
Over the last three years, Tailam Tech Construction Holdings Limited has shrunk its earnings per share by 77% per year. It saw its revenue drop 25% over the last year.
Few shareholders would be pleased to read that EPS have declined. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Tailam Tech Construction Holdings Limited Been A Good Investment?
Few Tailam Tech Construction Holdings Limited shareholders would feel satisfied with the return of -65% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
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, the board will get the chance to explain the steps it plans to take to improve business performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Tailam Tech Construction Holdings (1 doesn't sit too well with us!) that you should be aware of before investing here.
Important note: Tailam Tech Construction 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.