Key Insights

• CNT Group will host its Annual General Meeting on 4th of June
• CEO Chi Kwan Chong's total compensation includes salary of HK$1.39m
• The overall pay is 69% above the industry average
• CNT Group's EPS declined by 10% over the past three years while total shareholder loss over the past three years was 27%

Shareholders will probably not be too impressed with the underwhelming results at CNT Group Limited (HKG:701) recently. At the upcoming AGM on 4th of June, shareholders can hear from the board including their plans for turning around performance. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

How Does Total Compensation For Chi Kwan Chong Compare With Other Companies In The Industry?

According to our data, CNT Group Limited has a market capitalization of HK$495m, and paid its CEO total annual compensation worth HK$2.5m over the year to December 2023. We note that's a decrease of 15% compared to last year. Notably, the salary which is HK$1.39m, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the Hong Kong Chemicals industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.5m. This suggests that Chi Kwan Chong is paid more than the median for the industry.

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. In CNT Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at CNT Group Limited's Growth Numbers

Over the last three years, CNT Group Limited has shrunk its earnings per share by 10% per year. Its revenue is down 26% over the previous year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 CNT Group Limited Been A Good Investment?

Since shareholders would have lost about 27% over three years, some CNT Group Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for CNT Group (1 can't be ignored!) that you should be aware of before investing here.

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.