Key Insights

• WAC Holdings will host its Annual General Meeting on 29th of September
• Total pay for CEO Po Lam Kwong includes HK$2.16m salary
• The overall pay is 80% above the industry average
• WAC Holdings' three-year loss to shareholders was 95% while its EPS was down 12% over the past three years

The results at WAC Holdings Limited (HKG:8619) have been quite disappointing recently and CEO Po Lam Kwong bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 29th of September. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for WAC Holdings

Comparing WAC Holdings Limited's CEO Compensation With The Industry

According to our data, WAC Holdings Limited has a market capitalization of HK$46m, and paid its CEO total annual compensation worth HK$4.1m over the year to March 2023. That's a notable increase of 36% on last year. Notably, the salary which is HK$2.16m, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the Hong Kong Professional Services industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.2m. Hence, we can conclude that Po Lam Kwong is remunerated higher than the industry median.

Speaking on an industry level, nearly 80% of total compensation represents salary, while the remainder of 20% is other remuneration. WAC Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

WAC Holdings Limited's Growth

WAC Holdings Limited has reduced its earnings per share by 12% a year over the last three years. It achieved revenue growth of 12% over the last year.

Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet 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 WAC Holdings Limited Been A Good Investment?

The return of -95% over three years would not have pleased WAC Holdings Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for WAC Holdings that investors should look into moving forward.

Switching gears from WAC 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.