Key Insights

• HSC Resources Group will host its Annual General Meeting on 25th of October
• Salary of HK$3.00m is part of CEO Alexander Li's total remuneration
• The total compensation is 69% higher than the average for the industry
• Over the past three years, HSC Resources Group's EPS fell by 48% and over the past three years, the total loss to shareholders 99%

The underwhelming share price performance of HSC Resources Group Limited (HKG:1850) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 25th of October and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

How Does Total Compensation For Alexander Li Compare With Other Companies In The Industry?

At the time of writing, our data shows that HSC Resources Group Limited has a market capitalization of HK$37m, and reported total annual CEO compensation of HK$3.0m for the year to April 2024. This was the same as last year. Notably, the salary which is HK$3.00m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Commercial Services industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.8m. This suggests that Alexander Li is paid more than the median for the industry.

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. Investors will find it interesting that HSC Resources Group pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

HSC Resources Group Limited's Growth

Over the last three years, HSC Resources Group Limited has shrunk its earnings per share by 48% per year. Its revenue is up 42% over the last year.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 HSC Resources Group Limited Been A Good Investment?

Few HSC Resources Group Limited shareholders would feel satisfied with the return of -99% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

HSC Resources Group pays its CEO a majority of compensation through a salary. The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with 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 5 warning signs for HSC Resources Group (of which 3 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from HSC Resources Group, 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.