Key Insights

• Hing Ming Holdings to hold its Annual General Meeting on 26th of August
• CEO Hing Keung Tang's total compensation includes salary of HK$7.00m
• Total compensation is 444% above industry average
• Over the past three years, Hing Ming Holdings' EPS fell by 59% and over the past three years, the total loss to shareholders 92%

Shareholders will probably not be too impressed with the underwhelming results at Hing Ming Holdings Limited (HKG:8425) recently. At the upcoming AGM on 26th of August, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

How Does Total Compensation For Hing Keung Tang Compare With Other Companies In The Industry?

According to our data, Hing Ming Holdings Limited has a market capitalization of HK$15m, and paid its CEO total annual compensation worth HK$12m over the year to March 2024. Notably, that's an increase of 54% over the year before. In particular, the salary of HK$7.00m, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Trade Distributors industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.2m. Hence, we can conclude that Hing Keung Tang is remunerated higher than the industry median.

On an industry level, around 94% of total compensation represents salary and 6% is other remuneration. It's interesting to note that Hing Ming Holdings allocates a smaller portion of compensation to salary in comparison to the broader 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 Hing Ming Holdings Limited's Growth Numbers

Over the last three years, Hing Ming Holdings Limited has shrunk its earnings per share by 59% per year. In the last year, its revenue is up 9.8%.

Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Hing Ming Holdings Limited Been A Good Investment?

With a total shareholder return of -92% over three years, Hing Ming Holdings Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Hing Ming Holdings (3 can't be ignored!) that you should be aware of before investing here.

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.

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