Key Insights

• Netjoy Holdings' Annual General Meeting to take place on 24th of June
• Salary of CN¥699.0k is part of CEO Chen Wang's total remuneration
• Total compensation is 49% below industry average
• Over the past three years, Netjoy Holdings' EPS fell by 59% and over the past three years, the total loss to shareholders 90%

The underwhelming performance at Netjoy Holdings Limited (HKG:2131) recently has probably not pleased shareholders. The next AGM coming up on 24th of June will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

Comparing Netjoy Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Netjoy Holdings Limited has a market capitalization of HK$474m, and reported total annual CEO compensation of CN¥918k for the year to December 2023. We note that's a decrease of 9.6% compared to last year. In particular, the salary of CN¥699.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Media industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.8m. That is to say, Chen Wang is paid under the industry median. Moreover, Chen Wang also holds HK$71m worth of Netjoy Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 86% of total compensation out of all the companies we analyzed, while other remuneration made up 14% of the pie. Netjoy Holdings sets aside a smaller share of compensation for salary, in comparison to the overall 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.

Netjoy Holdings Limited's Growth

Over the last three years, Netjoy Holdings Limited has shrunk its earnings per share by 59% per year. Its revenue is down 9.1% over the previous year.

Overall this is not a very positive result for shareholders. 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. 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 Netjoy Holdings Limited Been A Good Investment?

The return of -90% over three years would not have pleased Netjoy Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Netjoy Holdings (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com