Key Insights

• WAC Holdings will host its Annual General Meeting on 17th of November
• Total pay for CEO Po Lam Kwong includes HK$2.16m salary
• The total compensation is 84% higher than the average for the industry
• Over the past three years, WAC Holdings' EPS fell by 12% and over the past three years, the total loss to shareholders 82%

WAC Holdings Limited (HKG:8619) has not performed well recently and CEO Po Lam Kwong will probably need to up their game. At the upcoming AGM on 17th of November, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for WAC Holdings

How Does Total Compensation For Po Lam Kwong Compare With Other Companies In The Industry?

According to our data, WAC Holdings Limited has a market capitalization of HK$149m, and paid its CEO total annual compensation worth HK$4.1m over the year to March 2023. That's a notable increase of 36% on last year. Notably, the salary which is HK$2.16m, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the Hong Kong Professional Services industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.2m. Accordingly, our analysis reveals that WAC Holdings Limited pays Po Lam Kwong north of the industry median.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. It's interesting to note that WAC Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. 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.

WAC Holdings Limited's Growth

Over the last three years, WAC Holdings Limited has shrunk its earnings per share by 12% per year. Its revenue is up 12% over the last year.

Few shareholders would be pleased to read that EPS have declined. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 WAC Holdings Limited Been A Good Investment?

Few WAC Holdings Limited shareholders would feel satisfied with the return of -82% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for WAC Holdings you should be aware of, and 1 of them is concerning.

Important note: WAC Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.