Key Insights
- Chen Hsong Holdings will host its Annual General Meeting on 26th of August
- Salary of HK$6.18m is part of CEO Lai Yuen Chiang's total remuneration
- The overall pay is 307% above the industry average
- Over the past three years, Chen Hsong Holdings' EPS fell by 21% and over the past three years, the total loss to shareholders 35%
Chen Hsong Holdings Limited (HKG:57) has not performed well recently and CEO Lai Yuen Chiang will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 26th of August. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.
Check out our latest analysis for Chen Hsong Holdings
How Does Total Compensation For Lai Yuen Chiang Compare With Other Companies In The Industry?
According to our data, Chen Hsong Holdings Limited has a market capitalization of HK$908m, and paid its CEO total annual compensation worth HK$8.0m over the year to March 2024. We note that's a decrease of 33% compared to last year. We note that the salary portion, which stands at HK$6.18m constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the Hong Kong Machinery industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.0m. Accordingly, our analysis reveals that Chen Hsong Holdings Limited pays Lai Yuen Chiang north of the industry median. Moreover, Lai Yuen Chiang also holds HK$7.2m worth of Chen Hsong Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | HK$6.2m | HK$6.2m | 77% |
| Other | HK$1.9m | HK$5.9m | 23% |
| Total Compensation | HK$8.0m | HK$12m | 100% |
On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. Chen Hsong Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.
Chen Hsong Holdings Limited's Growth
Chen Hsong Holdings Limited has reduced its earnings per share by 21% a year over the last three years. In the last year, its revenue is down 13%.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Chen Hsong Holdings Limited Been A Good Investment?
The return of -35% over three years would not have pleased Chen Hsong Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
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.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Chen Hsong Holdings that investors should think about before committing capital to this stock.
Switching gears from Chen Hsong Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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.