Key Insights

• Hang Sang (Siu Po) International Holding's Annual General Meeting to take place on 1st of December
• Total pay for CEO Samson Fung includes HK$2.15m salary
• Total compensation is similar to the industry average
• Hang Sang (Siu Po) International Holding's three-year loss to shareholders was 26% while its EPS was down 43% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Hang Sang (Siu Po) International Holding Company Limited (HKG:3626) recently. At the upcoming AGM on 1st of December, 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 Hang Sang (Siu Po) International Holding

How Does Total Compensation For Samson Fung Compare With Other Companies In The Industry?

At the time of writing, our data shows that Hang Sang (Siu Po) International Holding Company Limited has a market capitalization of HK$61m, and reported total annual CEO compensation of HK$2.2m for the year to June 2023. There was no change in the compensation compared to last year. We note that the salary portion, which stands at HK$2.15m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Packaging industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.8m. So it looks like Hang Sang (Siu Po) International Holding compensates Samson Fung in line with the median for the industry.

Talking in terms of the industry, salary represented approximately 67% of total compensation out of all the companies we analyzed, while other remuneration made up 33% of the pie. Hang Sang (Siu Po) International Holding has gone down a largely traditional route, paying Samson Fung 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.

A Look at Hang Sang (Siu Po) International Holding Company Limited's Growth Numbers

Over the last three years, Hang Sang (Siu Po) International Holding Company Limited has shrunk its earnings per share by 43% per year. Its revenue is down 28% 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Hang Sang (Siu Po) International Holding Company Limited Been A Good Investment?

With a three year total loss of 26% for the shareholders, Hang Sang (Siu Po) International Holding Company Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Hang Sang (Siu Po) International Holding pays its CEO a majority of compensation through a salary. 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 compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Hang Sang (Siu Po) International Holding that investors should be aware of in a dynamic business environment.

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.