Key Insights

• Major Holdings' Annual General Meeting to take place on 9th of August
• CEO Chun To Cheung's total compensation includes salary of HK$500.0k
• The overall pay is 81% below the industry average
• Over the past three years, Major Holdings' EPS fell by 47% and over the past three years, the total loss to shareholders 40%

Performance at Major Holdings Limited (HKG:1389) has not been particularly rosy recently and shareholders will likely be holding CEO Chun To Cheung and the board accountable for this. At the upcoming AGM on 9th of August, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. The data we gathered below shows that CEO compensation looks acceptable for now.

Comparing Major Holdings Limited's CEO Compensation With The Industry

Our data indicates that Major Holdings Limited has a market capitalization of HK$111m, and total annual CEO compensation was reported as HK$508k for the year to March 2024. We note that's a decrease of 58% compared to last year. In particular, the salary of HK$500.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Consumer Retailing industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.6m. That is to say, Chun To Cheung is paid under the industry median. Moreover, Chun To Cheung also holds HK$60m worth of Major Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Investors will find it interesting that Major Holdings 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.

Major Holdings Limited's Growth

Over the last three years, Major Holdings Limited has shrunk its earnings per share by 47% per year. It saw its revenue drop 15% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Major Holdings Limited Been A Good Investment?

The return of -40% over three years would not have pleased Major Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Chun To receives almost all of their compensation through a salary. 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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 3 warning signs for Major Holdings (1 shouldn't be ignored!) that you should be aware of before investing here.

Important note: Major Holdings 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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