Key Insights

• Town Ray Holdings to hold its Annual General Meeting on 21st of June
• Salary of HK$1.93m is part of CEO Wai Ming Chan's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Town Ray Holdings' EPS grew by 7.3% and over the past three years, the total shareholder return was 73%

Performance at Town Ray Holdings Limited (HKG:1692) has been reasonably good and CEO Wai Ming Chan has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 21st of June. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

Comparing Town Ray Holdings Limited's CEO Compensation With The Industry

Our data indicates that Town Ray Holdings Limited has a market capitalization of HK$919m, and total annual CEO compensation was reported as HK$2.0m for the year to December 2023. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at HK$1.93m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Consumer Durables industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.3m. This suggests that Town Ray Holdings remunerates its CEO largely in line with the industry average. Moreover, Wai Ming Chan also holds HK$13m worth of Town Ray Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. Investors will find it interesting that Town Ray Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. 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.

A Look at Town Ray Holdings Limited's Growth Numbers

Over the past three years, Town Ray Holdings Limited has seen its earnings per share (EPS) grow by 7.3% per year. In the last year, its revenue is down 14%.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Town Ray Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 73% over three years, Town Ray Holdings Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Wai Ming receives almost all of their compensation through a salary. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Town Ray Holdings that investors should be aware of in a dynamic business environment.

Important note: Town Ray 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com