Key Insights

• Sheung Yue Group Holdings will host its Annual General Meeting on 1st of August
• CEO Edmond Chan's total compensation includes salary of HK$1.63m
• Total compensation is similar to the industry average
• Sheung Yue Group Holdings' three-year loss to shareholders was 35% while its EPS grew by 43% over the past three years

The underwhelming share price performance of Sheung Yue Group Holdings Limited (HKG:1633) in the past three years would have disappointed many shareholders. 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 1st of August 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 discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Comparing Sheung Yue Group Holdings Limited's CEO Compensation With The Industry

According to our data, Sheung Yue Group Holdings Limited has a market capitalization of HK$71m, and paid its CEO total annual compensation worth HK$1.8m over the year to March 2024. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at HK$1.63m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.2m. From this we gather that Edmond Chan is paid around the median for CEOs in the industry.

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. There isn't a significant difference between Sheung Yue Group Holdings and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Sheung Yue Group Holdings Limited's Growth Numbers

Sheung Yue Group Holdings Limited has seen its earnings per share (EPS) increase by 43% a year over the past three years. In the last year, its revenue is up 15%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Sheung Yue Group Holdings Limited Been A Good Investment?

The return of -35% over three years would not have pleased Sheung Yue Group Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

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. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 2 which are potentially serious) in Sheung Yue Group Holdings we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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