Key Insights
- MS Concept to hold its Annual General Meeting on 2nd of August
- Salary of HK$3.60m is part of CEO John Kwong's total remuneration
- Total compensation is 77% above industry average
- MS Concept's EPS declined by 106% over the past three years while total shareholder loss over the past three years was 72%
MS Concept Limited (HKG:8447) has not performed well recently and CEO John Kwong will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 2nd of August. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.
Comparing MS Concept Limited's CEO Compensation With The Industry
According to our data, MS Concept Limited has a market capitalization of HK$41m, and paid its CEO total annual compensation worth HK$3.6m over the year to March 2024. That's a modest increase of 3.4% on the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$3.6m.
On comparing similar-sized companies in the Hong Kong Hospitality industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.0m. Accordingly, our analysis reveals that MS Concept Limited pays John Kwong north of the industry median.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | HK$3.6m | HK$3.5m | 100% |
| Other | - | - | - |
| Total Compensation | HK$3.6m | HK$3.5m | 100% |
On an industry level, roughly 87% of total compensation represents salary and 13% is other remuneration. Speaking on a company level, MS Concept prefers to tread along a traditional path, disbursing all compensation through a salary. 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.
MS Concept Limited's Growth
MS Concept Limited has reduced its earnings per share by 106% a year over the last three years. It saw its revenue drop 9.9% 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 MS Concept Limited Been A Good Investment?
Few MS Concept Limited shareholders would feel satisfied with the return of -72% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
MS Concept rewards its CEO solely through a salary, ignoring non-salary benefits completely. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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 a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for MS Concept that investors should look into moving forward.
Important note: MS Concept is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
