Key Insights
- Perennial International will host its Annual General Meeting on 20th of May
- Total pay for CEO Chung Hung Mon includes HK$5.76m salary
- Total compensation is 607% above industry average
- Perennial International's three-year loss to shareholders was 11% while its EPS grew by 24% over the past three years
In the past three years, shareholders of Perennial International Limited (HKG:725) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 20th of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
Check out our latest analysis for Perennial International
How Does Total Compensation For Chung Hung Mon Compare With Other Companies In The Industry?
Our data indicates that Perennial International Limited has a market capitalization of HK$127m, and total annual CEO compensation was reported as HK$11m for the year to December 2024. That's a notable increase of 48% on last year. In particular, the salary of HK$5.76m, makes up a fairly large portion of the total compensation being paid to the CEO.
In comparison with other companies in the Hong Kong Electrical industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.5m. This suggests that Chung Hung Mon is paid more than the median for the industry.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | HK$5.8m | HK$5.3m | 53% |
| Other | HK$5.0m | HK$2.0m | 47% |
| Total Compensation | HK$11m | HK$7.3m | 100% |
Talking in terms of the industry, salary represented approximately 74% of total compensation out of all the companies we analyzed, while other remuneration made up 26% of the pie. Perennial International pays a modest slice of remuneration through salary, as compared to the broader 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.
Perennial International Limited's Growth
Perennial International Limited's earnings per share (EPS) grew 24% per year over the last three years. In the last year, its revenue is up 8.3%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Perennial International Limited Been A Good Investment?
With a three year total loss of 11% for the shareholders, Perennial International Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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 a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Perennial International that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.