Key Insights

• Bosideng International Holdings will host its Annual General Meeting on 20th of August
• Total pay for CEO Dekang Gao includes CN¥7.11m salary
• The overall pay is comparable to the industry average
• Bosideng International Holdings' three-year loss to shareholders was 24% while its EPS grew by 21% over the past three years

The underwhelming share price performance of Bosideng International Holdings Limited (HKG:3998) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 20th of August could be an opportunity for shareholders to bring these concerns to the board's attention. 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.

Comparing Bosideng International Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Bosideng International Holdings Limited has a market capitalization of HK$43b, and reported total annual CEO compensation of CN¥7.4m for the year to March 2024. Notably, that's an increase of 44% over the year before. Notably, the salary which is CN¥7.11m, represents most of the total compensation being paid.

On examining similar-sized companies in the Hong Kong Luxury industry with market capitalizations between HK$31b and HK$93b, we discovered that the median CEO total compensation of that group was CN¥8.1m. So it looks like Bosideng International Holdings compensates Dekang Gao in line with the median for the industry. Furthermore, Dekang Gao directly owns HK$1.0b worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 91% of total compensation represents salary and 9% is other remuneration. Bosideng International Holdings has gone down a largely traditional route, paying Dekang Gao a high salary, giving it preference over 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.

Bosideng International Holdings Limited's Growth

Bosideng International Holdings Limited has seen its earnings per share (EPS) increase by 21% a year over the past three years. In the last year, its revenue is up 38%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Bosideng International Holdings Limited Been A Good Investment?

With a three year total loss of 24% for the shareholders, Bosideng International Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Dekang receives almost all of their compensation through a salary. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. 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 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 2 warning signs for Bosideng International Holdings that you should be aware of before investing.

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.