Key Insights

• Edvantage Group Holdings to hold its Annual General Meeting on 19th of January
• Total pay for CEO Yi Man Liu includes CN¥1.99m salary
• The overall pay is comparable to the industry average
• Edvantage Group Holdings' three-year loss to shareholders was 68% while its EPS grew by 25% over the past three years

Shareholders of Edvantage Group Holdings Limited (HKG:382) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 19th of January could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Edvantage Group Holdings

Comparing Edvantage Group Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Edvantage Group Holdings Limited has a market capitalization of HK$2.7b, and reported total annual CEO compensation of CN¥2.6m for the year to August 2023. Notably, that's an increase of 44% over the year before. In particular, the salary of CN¥1.99m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the Hong Kong Consumer Services industry with market caps ranging from HK$1.6b to HK$6.3b, we found that the median CEO total compensation was CN¥2.4m. From this we gather that Yi Man Liu is paid around the median for CEOs in the industry. What's more, Yi Man Liu holds HK$2.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 82% of total compensation out of all the companies we analyzed, while other remuneration made up 18% of the pie. There isn't a significant difference between Edvantage Group Holdings and the broader market, in terms of salary allocation in the overall compensation package. 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.

Edvantage Group Holdings Limited's Growth

Over the past three years, Edvantage Group Holdings Limited has seen its earnings per share (EPS) grow by 25% per year. In the last year, its revenue is up 17%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Edvantage Group Holdings Limited Been A Good Investment?

The return of -68% over three years would not have pleased Edvantage Group Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. 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. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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. That's why we did some digging and identified 1 warning sign for Edvantage Group Holdings that investors should think about before committing capital to this stock.

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.