Key Insights

• Takbo Group Holdings' Annual General Meeting to take place on 10th of May
• CEO Naam Or's total compensation includes salary of HK$3.01m
• The total compensation is 219% higher than the average for the industry
• Over the past three years, Takbo Group Holdings' EPS fell by 7.3% and over the past three years, the total loss to shareholders 10.0%

The results at Takbo Group Holdings Limited (HKG:8436) have been quite disappointing recently and CEO Naam Or bears some responsibility for this. At the upcoming AGM on 10th of May, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Comparing Takbo Group Holdings Limited's CEO Compensation With The Industry

According to our data, Takbo Group Holdings Limited has a market capitalization of HK$86m, and paid its CEO total annual compensation worth HK$7.6m over the year to December 2023. That's a notable increase of 55% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$3.0m.

For comparison, other companies in the Hong Kong Personal Products industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.4m. Hence, we can conclude that Naam Or is remunerated higher than the industry median.

On an industry level, around 72% of total compensation represents salary and 28% is other remuneration. Takbo Group Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Takbo Group Holdings Limited's Growth Numbers

Over the last three years, Takbo Group Holdings Limited has shrunk its earnings per share by 7.3% per year. Its revenue is up 3.0% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. 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 Takbo Group Holdings Limited Been A Good Investment?

Given the total shareholder loss of 10.0% over three years, many shareholders in Takbo Group Holdings Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Takbo Group Holdings 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.