Key Insights

• Time Watch Investments' Annual General Meeting to take place on 24th of November
• CEO Michael Tung's total compensation includes salary of HK$7.00m
• The total compensation is 205% higher than the average for the industry
• Over the past three years, Time Watch Investments' EPS fell by 36% and over the past three years, the total loss to shareholders 18%

Shareholders will probably not be too impressed with the underwhelming results at Time Watch Investments Limited (HKG:2033) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 24th of November. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Time Watch Investments

Comparing Time Watch Investments Limited's CEO Compensation With The Industry

Our data indicates that Time Watch Investments Limited has a market capitalization of HK$1.1b, and total annual CEO compensation was reported as HK$7.1m for the year to June 2023. There was no change in the compensation compared to last year. Notably, the salary which is HK$7.00m, represents most of the total compensation being paid.

On comparing similar-sized companies in the Hong Kong Luxury industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.3m. Hence, we can conclude that Michael Tung is remunerated higher than the industry median. What's more, Michael Tung holds HK$792m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. Time Watch Investments has gone down a largely traditional route, paying Michael Tung a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Time Watch Investments Limited's Growth Numbers

Over the last three years, Time Watch Investments Limited has shrunk its earnings per share by 36% per year. It saw its revenue drop 30% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Time Watch Investments Limited Been A Good Investment?

With a three year total loss of 18% for the shareholders, Time Watch Investments Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Michael receives almost all of their compensation through a salary. 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 compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is significant) in Time Watch Investments 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.