Key Insights

• Polyfair Holdings' Annual General Meeting to take place on 5th of September
• CEO Stephen Yu's total compensation includes salary of HK$2.26m
• Total compensation is similar to the industry average
• Over the past three years, Polyfair Holdings' EPS fell by 14% and over the past three years, the total loss to shareholders 44%

In the past three years, the share price of Polyfair Holdings Limited (HKG:8532) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. The AGM coming up on 5th of September will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

Comparing Polyfair Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Polyfair Holdings Limited has a market capitalization of HK$43m, and reported total annual CEO compensation of HK$2.5m for the year to March 2024. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is HK$2.26m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Construction industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.3m. This suggests that Polyfair Holdings remunerates its CEO largely in line with the industry average.

Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. Our data reveals that Polyfair Holdings allocates salary more or less in line with the wider market. 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.

Polyfair Holdings Limited's Growth

Over the last three years, Polyfair Holdings Limited has shrunk its earnings per share by 14% per year. It achieved revenue growth of 29% over the last year.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Polyfair Holdings Limited Been A Good Investment?

The return of -44% over three years would not have pleased Polyfair Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In 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 is in line with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 3 which are significant) in Polyfair Holdings we think you should know about.

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.