Performance at SG Group Holdings Limited (HKG:1657) has been rather uninspiring recently and shareholders may be wondering how CEO Charles Choi 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 26 October 2022. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for SG Group Holdings

How Does Total Compensation For Charles Choi Compare With Other Companies In The Industry?

At the time of writing, our data shows that SG Group Holdings Limited has a market capitalization of HK$177m, and reported total annual CEO compensation of HK$983k for the year to April 2022. That's a notable increase of 41% on last year. In particular, the salary of HK$936.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.0m. That is to say, Charles Choi is paid under the industry median. Moreover, Charles Choi also holds HK$132m worth of SG Group Holdings 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 93% of total compensation represents salary and 7% is other remuneration. Investors will find it interesting that SG Group Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

SG Group Holdings Limited's Growth

Over the last three years, SG Group Holdings Limited has shrunk its earnings per share by 70% per year. In the last year, its revenue is up 40%.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 SG Group Holdings Limited Been A Good Investment?

With a three year total loss of 7.8% for the shareholders, SG Group Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Charles receives almost all of their compensation through a salary. The decline in share price is rather disappointing to shareholders. This may have to do with the lack of earnings growth at the company, which may explain the lacklustre returns. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board's judgement and decision-making is aligned with their expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for SG Group Holdings (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from SG Group Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.