Key Insights

• Modern Healthcare Technology Holdings will host its Annual General Meeting on 28th of August
• Salary of HK$15.7m is part of CEO Joyce Tsang's total remuneration
• The total compensation is 697% higher than the average for the industry
• Over the past three years, Modern Healthcare Technology Holdings' EPS fell by 90% and over the past three years, the total loss to shareholders 60%

Shareholders will probably not be too impressed with the underwhelming results at Modern Healthcare Technology Holdings Limited (HKG:919) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 28th of August. 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.

Comparing Modern Healthcare Technology Holdings Limited's CEO Compensation With The Industry

According to our data, Modern Healthcare Technology Holdings Limited has a market capitalization of HK$85m, and paid its CEO total annual compensation worth HK$16m over the year to March 2024. We note that's an increase of 22% above last year. In particular, the salary of HK$15.7m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Consumer Services industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.0m. This suggests that Joyce Tsang is paid more than the median for the industry. Furthermore, Joyce Tsang directly owns HK$64m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. Modern Healthcare Technology Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. 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 Modern Healthcare Technology Holdings Limited's Growth Numbers

Over the last three years, Modern Healthcare Technology Holdings Limited has shrunk its earnings per share by 90% per year. Its revenue is up 12% over the last year.

The decline in EPS is a bit concerning. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Modern Healthcare Technology Holdings Limited Been A Good Investment?

The return of -60% over three years would not have pleased Modern Healthcare Technology Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Joyce receives almost all of their compensation through a salary. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Modern Healthcare Technology Holdings (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.