Key Insights

• Tai Cheung Holdings will host its Annual General Meeting on 28th of August
• Total pay for CEO David Chan includes HK$3.65m salary
• The total compensation is 36% higher than the average for the industry
• Tai Cheung Holdings' three-year loss to shareholders was 30% while its EPS grew by 66% over the past three years

In the past three years, the share price of Tai Cheung Holdings Limited (HKG:88) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 28th of August. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Comparing Tai Cheung Holdings Limited's CEO Compensation With The Industry

According to our data, Tai Cheung Holdings Limited has a market capitalization of HK$1.9b, and paid its CEO total annual compensation worth HK$4.8m over the year to March 2024. That's a fairly small increase of 3.7% over the previous year. Notably, the salary which is HK$3.65m, represents most of the total compensation being paid.

On comparing similar companies from the Hong Kong Real Estate industry with market caps ranging from HK$779m to HK$3.1b, we found that the median CEO total compensation was HK$3.6m. Hence, we can conclude that David Chan is remunerated higher than the industry median. Moreover, David Chan also holds HK$854m worth of Tai Cheung Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. Our data reveals that Tai Cheung Holdings allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Tai Cheung Holdings Limited's Growth Numbers

Tai Cheung Holdings Limited has seen its earnings per share (EPS) increase by 66% a year over the past three years. In the last year, its revenue is up 84%.

Overall this is a positive result for shareholders, showing that the company has improved in recent 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 Tai Cheung Holdings Limited Been A Good Investment?

Few Tai Cheung Holdings Limited shareholders would feel satisfied with the return of -30% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. 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 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 1 warning sign for Tai Cheung Holdings that investors should think about before committing capital to this stock.

Switching gears from Tai Cheung Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.