Key Insights

• AMS Public Transport Holdings will host its Annual General Meeting on 29th of August
• CEO Man Chun Chan's total compensation includes salary of HK$3.97m
• Total compensation is 848% above industry average
• Over the past three years, AMS Public Transport Holdings' EPS fell by 35% and over the past three years, the total shareholder return was 9.8%

The share price of AMS Public Transport Holdings Limited (HKG:77) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 29th of August. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

How Does Total Compensation For Man Chun Chan Compare With Other Companies In The Industry?

At the time of writing, our data shows that AMS Public Transport Holdings Limited has a market capitalization of HK$169m, and reported total annual CEO compensation of HK$4.4m for the year to March 2024. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at HK$3.97m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Transportation industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$461k. This suggests that Man Chun Chan is paid more than the median for the industry. Furthermore, Man Chun Chan directly owns HK$2.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 72% of total compensation out of all the companies we analyzed, while other remuneration made up 28% of the pie. AMS Public Transport Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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.

AMS Public Transport Holdings Limited's Growth

Over the last three years, AMS Public Transport Holdings Limited has shrunk its earnings per share by 35% per year. It achieved revenue growth of 5.0% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has AMS Public Transport Holdings Limited Been A Good Investment?

AMS Public Transport Holdings Limited has generated a total shareholder return of 9.8% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for AMS Public Transport Holdings that investors should be aware of in a dynamic business environment.

Switching gears from AMS Public Transport 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.