Key Insights

• Asia Grocery Distribution's Annual General Meeting to take place on 23rd of August
• Total pay for CEO Andy Wong includes HK$3.00m salary
• The overall pay is comparable to the industry average
• Over the past three years, Asia Grocery Distribution's EPS grew by 58% and over the past three years, the total loss to shareholders 54%

The underwhelming share price performance of Asia Grocery Distribution Limited (HKG:8413) 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 23rd 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 think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Comparing Asia Grocery Distribution Limited's CEO Compensation With The Industry

According to our data, Asia Grocery Distribution Limited has a market capitalization of HK$155m, and paid its CEO total annual compensation worth HK$3.3m over the year to March 2024. We note that's an increase of 17% above last year. Notably, the salary which is HK$3.00m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Consumer Retailing industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.6m. From this we gather that Andy Wong is paid around the median for CEOs in the industry.

Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. Asia Grocery Distribution is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Asia Grocery Distribution Limited's Growth Numbers

Asia Grocery Distribution Limited's earnings per share (EPS) grew 58% per year over the last three years. It achieved revenue growth of 2.2% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Asia Grocery Distribution Limited Been A Good Investment?

Few Asia Grocery Distribution Limited shareholders would feel satisfied with the return of -54% over three years. 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 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. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Asia Grocery Distribution that investors should be aware of in a dynamic business environment.

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.