Key Insights

• Eagle Nice (International) Holdings' Annual General Meeting to take place on 16th of August
• Salary of HK$4.32m is part of CEO Yuk Sing Chung's total remuneration
• The total compensation is 88% higher than the average for the industry
• Eagle Nice (International) Holdings' total shareholder return over the past three years was 19% while its EPS was down 8.0% over the past three years

The share price of Eagle Nice (International) Holdings Limited (HKG:2368) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 16th of August. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

How Does Total Compensation For Yuk Sing Chung Compare With Other Companies In The Industry?

At the time of writing, our data shows that Eagle Nice (International) Holdings Limited has a market capitalization of HK$2.6b, and reported total annual CEO compensation of HK$7.8m for the year to March 2024. Notably, that's a decrease of 9.9% over the year before. In particular, the salary of HK$4.32m, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Luxury industry with market capitalizations ranging between HK$1.6b and HK$6.2b had a median total CEO compensation of HK$4.1m. Hence, we can conclude that Yuk Sing Chung is remunerated higher than the industry median. What's more, Yuk Sing Chung holds HK$424m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 91% of total compensation represents salary and 9% is other remuneration. Eagle Nice (International) Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Eagle Nice (International) Holdings Limited's Growth

Over the last three years, Eagle Nice (International) Holdings Limited has shrunk its earnings per share by 8.0% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. 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 Eagle Nice (International) Holdings Limited Been A Good Investment?

With a total shareholder return of 19% over three years, Eagle Nice (International) Holdings Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company's remuneration policies and evaluate if the board's judgement and decision-making is aligned with that of the company's shareholders.

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've identified 2 warning signs for Eagle Nice (International) Holdings that investors should be aware of in a dynamic business environment.

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.