Key Insights

• Travel Expert (Asia) Enterprises' Annual General Meeting to take place on 16th of August
• Total pay for CEO Hang Fan Cheng includes HK$480.0k salary
• The overall pay is 73% below the industry average
• Travel Expert (Asia) Enterprises' EPS grew by 98% over the past three years while total shareholder loss over the past three years was 37%

Performance at Travel Expert (Asia) Enterprises Limited (HKG:1235) has been rather uninspiring recently and shareholders may be wondering how CEO Hang Fan Cheng plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 16th of August. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We think CEO compensation looks appropriate given the data we have put together.

How Does Total Compensation For Hang Fan Cheng Compare With Other Companies In The Industry?

According to our data, Travel Expert (Asia) Enterprises Limited has a market capitalization of HK$73m, and paid its CEO total annual compensation worth HK$550k over the year to March 2024. We note that's an increase of 94% above last year. Notably, the salary which is HK$480.0k, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Hospitality industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.0m. In other words, Travel Expert (Asia) Enterprises pays its CEO lower than the industry median. Moreover, Hang Fan Cheng also holds HK$1.1m worth of Travel Expert (Asia) Enterprises stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 87% of total compensation represents salary and 13% is other remuneration. Travel Expert (Asia) Enterprises is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Travel Expert (Asia) Enterprises Limited's Growth Numbers

Travel Expert (Asia) Enterprises Limited's earnings per share (EPS) grew 98% per year over the last three years. In the last year, its revenue is up 303%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Travel Expert (Asia) Enterprises Limited Been A Good Investment?

The return of -37% over three years would not have pleased Travel Expert (Asia) Enterprises Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders are sitting on a loss is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for Travel Expert (Asia) Enterprises (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Important note: Travel Expert (Asia) Enterprises 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.