Key Insights

• Vitasoy International Holdings' Annual General Meeting to take place on 19th of August
• CEO Roberto Guidetti's total compensation includes salary of HK$7.69m
• The total compensation is 425% higher than the average for the industry
• Over the past three years, Vitasoy International Holdings' EPS fell by 40% and over the past three years, the total loss to shareholders 73%

Shareholders will probably not be too impressed with the underwhelming results at Vitasoy International Holdings Limited (HKG:345) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 19th 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. We present the case why we think CEO compensation is out of sync with company performance.

Comparing Vitasoy International Holdings Limited's CEO Compensation With The Industry

Our data indicates that Vitasoy International Holdings Limited has a market capitalization of HK$5.7b, and total annual CEO compensation was reported as HK$22m for the year to March 2024. We note that's an increase of 23% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$7.7m.

For comparison, other companies in the Hong Kong Food industry with market capitalizations ranging between HK$3.1b and HK$12b had a median total CEO compensation of HK$4.1m. This suggests that Roberto Guidetti is paid more than the median for the industry. Furthermore, Roberto Guidetti directly owns HK$33m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 72% of total compensation represents salary and 28% is other remuneration. Vitasoy International Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Vitasoy International Holdings Limited's Growth Numbers

Over the last three years, Vitasoy International Holdings Limited has shrunk its earnings per share by 40% per year. In the last year, its revenue is down 1.9%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Vitasoy International Holdings Limited Been A Good Investment?

With a total shareholder return of -73% over three years, Vitasoy International Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Vitasoy International Holdings (free visualization of insider trades).

Important note: Vitasoy International 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.

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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.