Key Insights

• Wing Fung Group Asia's Annual General Meeting to take place on 6th of June
• CEO Chi Keung Chung's total compensation includes salary of HK$4.98m
• The overall pay is 182% above the industry average
• Wing Fung Group Asia's EPS declined by 79% over the past three years while total shareholder loss over the past three years was 93%

The results at Wing Fung Group Asia Limited (HKG:8526) have been quite disappointing recently and CEO Chi Keung Chung bears some responsibility for this. At the upcoming AGM on 6th of June, 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

How Does Total Compensation For Chi Keung Chung Compare With Other Companies In The Industry?

According to our data, Wing Fung Group Asia Limited has a market capitalization of HK$18m, and paid its CEO total annual compensation worth HK$6.1m over the year to December 2023. Notably, that's an increase of 13% over the year before. We note that the salary portion, which stands at HK$4.98m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.2m. This suggests that Chi Keung Chung is paid more than the median for the industry. Furthermore, Chi Keung Chung directly owns HK$9.1m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 83% of total compensation represents salary and 17% is other remuneration. Although there is a difference in how total compensation is set, Wing Fung Group Asia more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Wing Fung Group Asia Limited's Growth Numbers

Over the last three years, Wing Fung Group Asia Limited has shrunk its earnings per share by 79% per year. Its revenue is down 38% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Wing Fung Group Asia Limited Been A Good Investment?

Few Wing Fung Group Asia Limited shareholders would feel satisfied with the return of -93% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Wing Fung Group Asia that investors should be aware of in a dynamic business environment.

Important note: Wing Fung Group Asia 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.