Key Insights

• Ritamix Global to hold its Annual General Meeting on 26th of June
• CEO Howard Lee's total compensation includes salary of RM816.0k
• Total compensation is similar to the industry average
• Over the past three years, Ritamix Global's EPS grew by 9.2% and over the past three years, the total loss to shareholders 20%

Shareholders of Ritamix Global Limited (HKG:1936) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 26th of June. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

How Does Total Compensation For Howard Lee Compare With Other Companies In The Industry?

At the time of writing, our data shows that Ritamix Global Limited has a market capitalization of HK$302m, and reported total annual CEO compensation of RM1.3m for the year to December 2023. Notably, that's an increase of 17% over the year before. Notably, the salary which is RM816.0k, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Consumer Retailing industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of RM1.3m. From this we gather that Howard Lee is paid around the median for CEOs in the industry.

On an industry level, around 73% of total compensation represents salary and 27% is other remuneration. Ritamix Global sets aside a smaller share of compensation for salary, in comparison to the overall 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 Ritamix Global Limited's Growth Numbers

Over the past three years, Ritamix Global Limited has seen its earnings per share (EPS) grow by 9.2% per year. Its revenue is down 12% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Ritamix Global Limited Been A Good Investment?

Given the total shareholder loss of 20% over three years, many shareholders in Ritamix Global Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in Ritamix Global we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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