Key Insights

• Grand Power Logistics Group will host its Annual General Meeting on 31st of May
• Total pay for CEO Ricky Chiu includes HK$3.00m salary
• Total compensation is 158% above industry average
• Grand Power Logistics Group's EPS declined by 103% over the past three years while total shareholder loss over the past three years was 74%

In the past three years, the share price of Grand Power Logistics Group Limited (HKG:8489) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 31st of May, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

How Does Total Compensation For Ricky Chiu Compare With Other Companies In The Industry?

At the time of writing, our data shows that Grand Power Logistics Group Limited has a market capitalization of HK$50m, and reported total annual CEO compensation of HK$3.3m for the year to December 2023. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at HK$3.00m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Logistics industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.3m. This suggests that Ricky Chiu is paid more than the median for the industry. Moreover, Ricky Chiu also holds HK$19m worth of Grand Power Logistics Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 78% of total compensation represents salary, while the remainder of 22% is other remuneration. According to our research, Grand Power Logistics Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Grand Power Logistics Group Limited's Growth

Grand Power Logistics Group Limited has reduced its earnings per share by 103% a year over the last three years. In the last year, its revenue is up 22%.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Grand Power Logistics Group Limited Been A Good Investment?

With a total shareholder return of -74% over three years, Grand Power Logistics Group Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. The upcoming AGM will provide shareholders the opportunity to revisit the company's remuneration policies and evaluate if the board's judgement and decision-making is aligned with that of the company's shareholders.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Grand Power Logistics Group that investors should look into moving forward.

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.