Key Insights

• Watts International Maritime will host its Annual General Meeting on 25th of June
• Total pay for CEO Yun Wan includes CN¥557.0k salary
• The overall pay is 35% below the industry average
• Watts International Maritime's EPS declined by 13% over the past three years while total shareholder loss over the past three years was 61%

Performance at Watts International Maritime Company Limited (HKG:2258) has not been particularly rosy recently and shareholders will likely be holding CEO Yun Wan and the board accountable for this. At the upcoming AGM on 25th of June, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

How Does Total Compensation For Yun Wan Compare With Other Companies In The Industry?

Our data indicates that Watts International Maritime Company Limited has a market capitalization of HK$164m, and total annual CEO compensation was reported as CN¥1.3m for the year to December 2023. That's a notable increase of 18% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥557k.

In comparison with other companies in the Hong Kong Construction industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥2.0m. That is to say, Yun Wan is paid under the industry median. Moreover, Yun Wan also holds HK$3.7m worth of Watts International Maritime stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 83% of total compensation represents salary and 17% is other remuneration. Watts International Maritime sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Watts International Maritime Company Limited's Growth Numbers

Over the last three years, Watts International Maritime Company Limited has shrunk its earnings per share by 13% per year. It achieved revenue growth of 3.3% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. 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 Watts International Maritime Company Limited Been A Good Investment?

With a total shareholder return of -61% over three years, Watts International Maritime Company Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 4 warning signs for Watts International Maritime (of which 2 are potentially serious!) 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