Key Insights

• Gain Plus Holdings' Annual General Meeting to take place on 16th of August
• Salary of HK$3.14m is part of CEO Chiu Kwan Tsang's total remuneration
• Total compensation is 710% above industry average
• Gain Plus Holdings' EPS declined by 6.7% over the past three years while total shareholder return over the past three years was 2.0%

The anaemic share price growth at Gain Plus Holdings Limited (HKG:9900) over the past few years has probably not impressed shareholders and may be due to earnings not growing over that period. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 16th of August. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Comparing Gain Plus Holdings Limited's CEO Compensation With The Industry

According to our data, Gain Plus Holdings Limited has a market capitalization of HK$603m, and paid its CEO total annual compensation worth HK$18m over the year to March 2024. Notably, that's an increase of 59% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$3.1m.

For comparison, other companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.3m. This suggests that Chiu Kwan Tsang is paid more than the median for the industry. What's more, Chiu Kwan Tsang holds HK$169m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. Gain Plus Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Gain Plus Holdings Limited's Growth Numbers

Gain Plus Holdings Limited has reduced its earnings per share by 6.7% a year over the last three years. It saw its revenue drop 4.9% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Gain Plus Holdings Limited Been A Good Investment?

Gain Plus Holdings Limited has generated a total shareholder return of 2.0% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

The flat share price growth combined with the the fact that earnings have failed to grow makes us wonder whether the share price will have any further strong momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may 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. In our study, we found 3 warning signs for Gain Plus Holdings you should be aware of, and 1 of them shouldn't be ignored.

Switching gears from Gain Plus 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.