Key Insights

• G.A. Holdings' Annual General Meeting to take place on 20th of June
• Total pay for CEO Choong Yew Choy includes HK$1.52m salary
• The total compensation is similar to the average for the industry
• Over the past three years, G.A. Holdings' EPS fell by 57% and over the past three years, the total loss to shareholders 52%

Shareholders will probably not be too impressed with the underwhelming results at G.A. Holdings Limited (HKG:8126) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 20th 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.

How Does Total Compensation For Choong Yew Choy Compare With Other Companies In The Industry?

At the time of writing, our data shows that G.A. Holdings Limited has a market capitalization of HK$55m, and reported total annual CEO compensation of HK$1.5m for the year to December 2023. That's slightly lower by 4.4% over the previous year. Notably, the salary of HK$1.5m is the entirety of the CEO compensation.

In comparison with other companies in the Hong Kong Retail Distributors industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.6m. This suggests that G.A. Holdings remunerates its CEO largely in line with the industry average.

On an industry level, roughly 94% of total compensation represents salary and 6% is other remuneration. Speaking on a company level, G.A. Holdings prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

G.A. Holdings Limited's Growth

Over the last three years, G.A. Holdings Limited has shrunk its earnings per share by 57% per year. Its revenue is down 9.7% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 G.A. Holdings Limited Been A Good Investment?

Few G.A. Holdings Limited shareholders would feel satisfied with the return of -52% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

G.A. Holdings rewards its CEO solely through a salary, ignoring non-salary benefits completely. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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 5 warning signs for G.A. Holdings (of which 3 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: G.A. 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.