Key Insights

• Kwoon Chung Bus Holdings will host its Annual General Meeting on 22nd of August
• CEO James Wong's total compensation includes salary of HK$2.60m
• Total compensation is similar to the industry average
• Kwoon Chung Bus Holdings' three-year loss to shareholders was 27% while its EPS grew by 15% over the past three years

In the past three years, the share price of Kwoon Chung Bus Holdings Limited (HKG:306) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 22nd of August. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Comparing Kwoon Chung Bus Holdings Limited's CEO Compensation With The Industry

Our data indicates that Kwoon Chung Bus Holdings Limited has a market capitalization of HK$720m, and total annual CEO compensation was reported as HK$2.8m for the year to March 2024. That's a notable increase of 42% on last year. We note that the salary portion, which stands at HK$2.60m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Transportation industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$3.9m. From this we gather that James Wong is paid around the median for CEOs in the industry. Moreover, James Wong also holds HK$5.4m worth of Kwoon Chung Bus Holdings 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 72% of total compensation represents salary and 28% is other remuneration. Kwoon Chung Bus Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Kwoon Chung Bus Holdings Limited's Growth

Over the past three years, Kwoon Chung Bus Holdings Limited has seen its earnings per share (EPS) grow by 15% per year. It achieved revenue growth of 60% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Kwoon Chung Bus Holdings Limited Been A Good Investment?

Since shareholders would have lost about 27% over three years, some Kwoon Chung Bus Holdings Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 2 which don't sit too well with us) in Kwoon Chung Bus Holdings we think you should know about.

Switching gears from Kwoon Chung Bus Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.