Key Insights
- S-Enjoy Service Group's Annual General Meeting to take place on 18th of June
- Total pay for CEO Xiaoming Qi includes CN¥3.01m salary
- Total compensation is 51% above industry average
- S-Enjoy Service Group's three-year loss to shareholders was 84% while its EPS was down 2.6% over the past three years
Shareholders will probably not be too impressed with the underwhelming results at S-Enjoy Service Group Co., Limited (HKG:1755) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 18th 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.
Check out our latest analysis for S-Enjoy Service Group
Comparing S-Enjoy Service Group Co., Limited's CEO Compensation With The Industry
At the time of writing, our data shows that S-Enjoy Service Group Co., Limited has a market capitalization of HK$2.8b, and reported total annual CEO compensation of CN¥4.8m for the year to December 2023. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at CN¥3.01m constitutes the majority of total compensation received by the CEO.
On comparing similar companies from the Hong Kong Real Estate industry with market caps ranging from HK$1.6b to HK$6.2b, we found that the median CEO total compensation was CN¥3.2m. Hence, we can conclude that Xiaoming Qi is remunerated higher than the industry median. Furthermore, Xiaoming Qi directly owns HK$12m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2023 | 2022 | Proportion (2023) |
| Salary | CN¥3.0m | CN¥3.0m | 62% |
| Other | CN¥1.8m | CN¥1.8m | 38% |
| Total Compensation | CN¥4.8m | CN¥4.8m | 100% |
On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. S-Enjoy Service Group pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
S-Enjoy Service Group Co., Limited's Growth
S-Enjoy Service Group Co., Limited has reduced its earnings per share by 2.6% a year over the last three years. Its revenue is up 4.7% over the last year.
The lack of EPS growth is certainly uninspiring. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has S-Enjoy Service Group Co., Limited Been A Good Investment?
The return of -84% over three years would not have pleased S-Enjoy Service Group Co., Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for S-Enjoy Service Group (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
Important note: S-Enjoy Service 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.