Key Insights

• TBK & Sons Holdings to hold its Annual General Meeting on 20th of December
• Salary of RM780.0k is part of CEO Han Tan's total remuneration
• Total compensation is 46% above industry average
• TBK & Sons Holdings' EPS declined by 108% over the past three years while total shareholder loss over the past three years was 70%

TBK & Sons Holdings Limited (HKG:1960) has not performed well recently and CEO Han Tan will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 20th of December. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

How Does Total Compensation For Han Tan Compare With Other Companies In The Industry?

At the time of writing, our data shows that TBK & Sons Holdings Limited has a market capitalization of HK$133m, and reported total annual CEO compensation of RM1.2m for the year to June 2024. We note that's a decrease of 27% compared to last year. In particular, the salary of RM780.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Energy Services industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was RM844k. Accordingly, our analysis reveals that TBK & Sons Holdings Limited pays Han Tan north of the industry median.

On an industry level, around 80% of total compensation represents salary and 20% is other remuneration. It's interesting to note that TBK & Sons Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

TBK & Sons Holdings Limited's Growth

Over the last three years, TBK & Sons Holdings Limited has shrunk its earnings per share by 108% per year. Its revenue is down 22% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 TBK & Sons Holdings Limited Been A Good Investment?

Few TBK & Sons Holdings Limited shareholders would feel satisfied with the return of -70% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for TBK & Sons Holdings (of which 1 is significant!) that you should know about in order to have a holistic understanding of the 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.