Key Insights

• Heng Tai Consumables Group to hold its Annual General Meeting on 9th of December
• Salary of HK$2.84m is part of CEO Kwok Hing Lam's total remuneration
• The overall pay is comparable to the industry average
• Heng Tai Consumables Group's EPS grew by 32% over the past three years while total shareholder loss over the past three years was 91%

In the past three years, the share price of Heng Tai Consumables Group Limited (HKG:197) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 9th of December could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

How Does Total Compensation For Kwok Hing Lam Compare With Other Companies In The Industry?

According to our data, Heng Tai Consumables Group Limited has a market capitalization of HK$43m, and paid its CEO total annual compensation worth HK$3.1m over the year to June 2024. This was the same as last year. Notably, the salary which is HK$2.84m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Consumer Retailing industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.6m. So it looks like Heng Tai Consumables Group compensates Kwok Hing Lam in line with the median for the industry. What's more, Kwok Hing Lam holds HK$7.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 67% of total compensation represents salary and 33% is other remuneration. Heng Tai Consumables Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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 Heng Tai Consumables Group Limited's Growth Numbers

Heng Tai Consumables Group Limited has seen its earnings per share (EPS) increase by 32% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Heng Tai Consumables Group Limited Been A Good Investment?

Few Heng Tai Consumables Group Limited shareholders would feel satisfied with the return of -91% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Heng Tai Consumables Group that investors should think about before committing capital to this 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.