Key Insights

• Hung Fook Tong Group Holdings will host its Annual General Meeting on 7th of June
• Salary of HK$3.06m is part of CEO Wing Fu Szeto's total remuneration
• The overall pay is 110% above the industry average
• Hung Fook Tong Group Holdings' three-year loss to shareholders was 64% while its EPS was down 124% over the past three years

Hung Fook Tong Group Holdings Limited (HKG:1446) has not performed well recently and CEO Wing Fu Szeto will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 7th of June. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Comparing Hung Fook Tong Group Holdings Limited's CEO Compensation With The Industry

According to our data, Hung Fook Tong Group Holdings Limited has a market capitalization of HK$110m, and paid its CEO total annual compensation worth HK$3.5m over the year to December 2023. That's a modest increase of 4.3% on the prior year. In particular, the salary of HK$3.06m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Beverage industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.7m. Hence, we can conclude that Wing Fu Szeto is remunerated higher than the industry median. What's more, Wing Fu Szeto holds HK$4.4m 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, around 74% of total compensation represents salary and 26% is other remuneration. According to our research, Hung Fook Tong Group Holdings has allocated a higher percentage of pay to salary in comparison to the wider 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 Hung Fook Tong Group Holdings Limited's Growth Numbers

Over the last three years, Hung Fook Tong Group Holdings Limited has shrunk its earnings per share by 124% per year. In the last year, its revenue is down 2.0%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Hung Fook Tong Group Holdings Limited Been A Good Investment?

With a total shareholder return of -64% over three years, Hung Fook Tong Group Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Hung Fook Tong Group Holdings (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Hung Fook Tong Group Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.