Key Insights

• Snack Empire Holdings will host its Annual General Meeting on 19th of August
• CEO Melvyn Wong's total compensation includes salary of S$1.16m
• The overall pay is 310% above the industry average
• Snack Empire Holdings' three-year loss to shareholders was 56% while its EPS was down 44% over the past three years

The results at Snack Empire Holdings Limited (HKG:1843) have been quite disappointing recently and CEO Melvyn Wong bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 19th of August. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Comparing Snack Empire Holdings Limited's CEO Compensation With The Industry

According to our data, Snack Empire Holdings Limited has a market capitalization of HK$117m, and paid its CEO total annual compensation worth S$1.4m over the year to March 2024. We note that's an increase of 16% above last year. In particular, the salary of S$1.16m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Hospitality industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was S$347k. Hence, we can conclude that Melvyn Wong is remunerated higher than the industry median.

On an industry level, roughly 87% of total compensation represents salary and 13% is other remuneration. Snack Empire Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Snack Empire Holdings Limited's Growth

Over the last three years, Snack Empire Holdings Limited has shrunk its earnings per share by 44% per year. Its revenue is down 4.7% over the previous year.

The decline in EPS is a bit concerning. 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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Snack Empire Holdings Limited Been A Good Investment?

Few Snack Empire Holdings Limited shareholders would feel satisfied with the return of -56% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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, 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 Snack Empire Holdings (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

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.