Key Insights

• BExcellent Group Holdings will host its Annual General Meeting on 19th of December
• Total pay for CEO Wai Lung Tam includes HK$1.34m salary
• The total compensation is 86% higher than the average for the industry
• BExcellent Group Holdings' EPS grew by 2.9% over the past three years while total shareholder loss over the past three years was 62%

In the past three years, the share price of BExcellent Group Holdings Limited (HKG:1775) 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 19th of December. They could also influence management through voting on resolutions such as executive remuneration. 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 BExcellent Group Holdings

Comparing BExcellent Group Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that BExcellent Group Holdings Limited has a market capitalization of HK$96m, and reported total annual CEO compensation of HK$3.3m for the year to July 2023. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$1.3m.

In comparison with other companies in the Hong Kong Consumer Services industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.7m. This suggests that Wai Lung Tam is paid more than the median for the industry.

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. It's interesting to note that BExcellent Group Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

BExcellent Group Holdings Limited's Growth

BExcellent Group Holdings Limited has seen its earnings per share (EPS) increase by 2.9% a year over the past three years. In the last year, its revenue is down 3.8%.

We generally like to see a little revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has BExcellent Group Holdings Limited Been A Good Investment?

Few BExcellent Group Holdings Limited shareholders would feel satisfied with the return of -62% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for BExcellent Group Holdings (1 shouldn't be ignored!) that you should be aware of before investing here.

Important note: BExcellent 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.