Key Insights

• AV Concept Holdings will host its Annual General Meeting on 30th of August
• Salary of HK$9.65m is part of CEO Yuk Kwan So's total remuneration
• Total compensation is 365% above industry average
• AV Concept Holdings' EPS declined by 26% over the past three years while total shareholder loss over the past three years was 12%

As many shareholders of AV Concept Holdings Limited (HKG:595) will be aware, they have not made a gain on their investment in the past three years. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 30th of August, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

How Does Total Compensation For Yuk Kwan So Compare With Other Companies In The Industry?

Our data indicates that AV Concept Holdings Limited has a market capitalization of HK$386m, and total annual CEO compensation was reported as HK$10m for the year to March 2024. That's a slight decrease of 5.1% on the prior year. Notably, the salary which is HK$9.65m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Electronic industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.2m. This suggests that Yuk Kwan So is paid more than the median for the industry. Furthermore, Yuk Kwan So directly owns HK$247m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 78% of total compensation represents salary, while the remainder of 22% is other remuneration. AV Concept Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

AV Concept Holdings Limited's Growth

Over the last three years, AV Concept Holdings Limited has shrunk its earnings per share by 26% per year. Its revenue is up 49% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 AV Concept Holdings Limited Been A Good Investment?

With a three year total loss of 12% for the shareholders, AV Concept Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Yuk Kwan receives almost all of their compensation through a salary. The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 5 warning signs for AV Concept Holdings you should be aware of, and 1 of them doesn't sit too well with us.

Switching gears from AV Concept 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.