Key Insights
- Grand Ming Group Holdings' Annual General Meeting to take place on 22nd of August
- Total pay for CEO Chi Wah Lau includes HK$2.86m salary
- The overall pay is 33% above the industry average
- Grand Ming Group Holdings' three-year loss to shareholders was 55% while its EPS grew by 26% over the past three years
In the past three years, the share price of Grand Ming Group Holdings Limited (HKG:1271) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 22nd of August. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Grand Ming Group Holdings
How Does Total Compensation For Chi Wah Lau Compare With Other Companies In The Industry?
Our data indicates that Grand Ming Group Holdings Limited has a market capitalization of HK$4.5b, and total annual CEO compensation was reported as HK$3.3m for the year to March 2024. We note that's a decrease of 29% compared to last year. Notably, the salary which is HK$2.86m, represents most of the total compensation being paid.
On comparing similar companies from the Hong Kong Construction industry with market caps ranging from HK$1.6b to HK$6.2b, we found that the median CEO total compensation was HK$2.5m. This suggests that Chi Wah Lau is paid more than the median for the industry. What's more, Chi Wah Lau holds HK$335m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | HK$2.9m | HK$2.8m | 85% |
| Other | HK$491k | HK$1.9m | 15% |
| Total Compensation | HK$3.3m | HK$4.7m | 100% |
Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. Our data reveals that Grand Ming Group Holdings allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Grand Ming Group Holdings Limited's Growth
Over the past three years, Grand Ming Group Holdings Limited has seen its earnings per share (EPS) grow by 26% per year. In the last year, its revenue is down 89%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Grand Ming Group Holdings Limited Been A Good Investment?
The return of -55% over three years would not have pleased Grand Ming Group Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Grand Ming Group Holdings (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.
Important note: Grand Ming Group 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.