Key Insights

• Fourace Industries Group Holdings will host its Annual General Meeting on 9th of August
• Total pay for CEO Shu Yeh Li includes HK$1.50m salary
• The overall pay is comparable to the industry average
• Over the past three years, Fourace Industries Group Holdings' EPS fell by 17% and over the past three years, the total loss to shareholders 30%

Fourace Industries Group Holdings Limited (HKG:1455) has not performed well recently and CEO Shu Yeh Li will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 9th of August. 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.

How Does Total Compensation For Shu Yeh Li Compare With Other Companies In The Industry?

According to our data, Fourace Industries Group Holdings Limited has a market capitalization of HK$214m, and paid its CEO total annual compensation worth HK$1.8m over the year to March 2024. We note that's a small decrease of 5.9% on last year. Notably, the salary which is HK$1.50m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Personal Products industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.2m. This suggests that Fourace Industries Group Holdings remunerates its CEO largely in line with the industry average. Moreover, Shu Yeh Li also holds HK$78m worth of Fourace Industries Group Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. It's interesting to note that Fourace Industries Group Holdings pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Fourace Industries Group Holdings Limited's Growth Numbers

Over the last three years, Fourace Industries Group Holdings Limited has shrunk its earnings per share by 17% per year. It saw its revenue drop 27% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Fourace Industries Group Holdings Limited Been A Good Investment?

Given the total shareholder loss of 30% over three years, many shareholders in Fourace Industries Group Holdings Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Fourace Industries Group Holdings that investors should think about before committing capital to this stock.

Switching gears from Fourace Industries Group 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.

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