Key Insights

• Edvance International Holdings to hold its Annual General Meeting on 23rd of August
• Total pay for CEO Raymond Liu includes HK$2.59m salary
• The overall pay is 67% above the industry average
• Edvance International Holdings' EPS declined by 5.1% over the past three years while total shareholder loss over the past three years was 66%

Shareholders will probably not be too impressed with the underwhelming results at Edvance International Holdings Limited (HKG:1410) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 23rd of August. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

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

Our data indicates that Edvance International Holdings Limited has a market capitalization of HK$196m, and total annual CEO compensation was reported as HK$3.7m for the year to March 2024. We note that's a small decrease of 4.0% on last year. In particular, the salary of HK$2.59m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Electronic industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.2m. This suggests that Raymond Liu is paid more than the median for the industry.

On an industry level, around 78% of total compensation represents salary and 22% is other remuneration. In Edvance International Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Edvance International Holdings Limited's Growth

Edvance International Holdings Limited has reduced its earnings per share by 5.1% a year over the last three years. Its revenue is up 8.3% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Edvance International Holdings Limited Been A Good Investment?

With a total shareholder return of -66% over three years, Edvance International Holdings Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Edvance International Holdings you should be aware of, and 1 of them is a bit unpleasant.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.