Key Insights

• Cheuk Nang (Holdings) to hold its Annual General Meeting on 20th of November
• Total pay for CEO Cecil Chao includes HK$9.49m salary
• Total compensation is 419% above industry average
• Over the past three years, Cheuk Nang (Holdings)'s EPS grew by 4.6% and over the past three years, the total loss to shareholders 26%

The underwhelming share price performance of Cheuk Nang (Holdings) Limited (HKG:131) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 20th of November. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

How Does Total Compensation For Cecil Chao Compare With Other Companies In The Industry?

According to our data, Cheuk Nang (Holdings) Limited has a market capitalization of HK$1.1b, and paid its CEO total annual compensation worth HK$9.5m over the year to June 2024. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$9.5m.

In comparison with other companies in the Hong Kong Real Estate industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.8m. Hence, we can conclude that Cecil Chao is remunerated higher than the industry median. Furthermore, Cecil Chao directly owns HK$815m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. Speaking on a company level, Cheuk Nang (Holdings) prefers to tread along a traditional path, disbursing all compensation through a salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Cheuk Nang (Holdings) Limited's Growth Numbers

Cheuk Nang (Holdings) Limited has seen its earnings per share (EPS) increase by 4.6% a year over the past three years. In the last year, its revenue is up 316%.

It's great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! 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 Cheuk Nang (Holdings) Limited Been A Good Investment?

Given the total shareholder loss of 26% over three years, many shareholders in Cheuk Nang (Holdings) Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Cheuk Nang (Holdings) pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Cheuk Nang (Holdings) we think you should know about.

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.