Key Insights

• SG Group Holdings to hold its Annual General Meeting on 31st of October
• Total pay for CEO Charles Choi includes HK$936.0k salary
• The overall pay is 49% below the industry average
• SG Group Holdings' EPS declined by 98% over the past three years while total shareholder return over the past three years was 60%

Shareholders may be wondering what CEO Charles Choi plans to do to improve the less than great performance at SG Group Holdings Limited (HKG:1657) recently. At the next AGM coming up on 31st of October, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

How Does Total Compensation For Charles Choi Compare With Other Companies In The Industry?

Our data indicates that SG Group Holdings Limited has a market capitalization of HK$307m, and total annual CEO compensation was reported as HK$962k for the year to April 2024. This means that the compensation hasn't changed much from last year. Notably, the salary which is HK$936.0k, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Luxury industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. In other words, SG Group Holdings pays its CEO lower than the industry median. Moreover, Charles Choi also holds HK$230m worth of SG Group Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 91% of total compensation out of all the companies we analyzed, while other remuneration made up 9% of the pie. SG Group Holdings has gone down a largely traditional route, paying Charles Choi a high salary, giving it preference over non-salary benefits. 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.

SG Group Holdings Limited's Growth

Over the last three years, SG Group Holdings Limited has shrunk its earnings per share by 98% per year. It saw its revenue drop 18% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 SG Group Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 60% over three years, SG Group Holdings Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

SG Group Holdings pays its CEO a majority of compensation through a salary. Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean these strong returns may not continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for SG Group Holdings (1 is a bit concerning!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.