Shareholders will probably not be too impressed with the underwhelming results at EDICO Holdings Limited (HKG:8450) recently. At the upcoming AGM on 22 February 2023, shareholders can hear from the board including their plans for turning around performance. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.
View our latest analysis for EDICO Holdings
How Does Total Compensation For Amy Donati Compare With Other Companies In The Industry?
According to our data, EDICO Holdings Limited has a market capitalization of HK$53m, and paid its CEO total annual compensation worth HK$1.9m over the year to September 2022. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is HK$1.73m, represents most of the total compensation being paid.
In comparison with other companies in the Hong Kong Commercial Services industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.9m. From this we gather that Amy Donati is paid around the median for CEOs in the industry.
| Component | 2022 | 2021 | Proportion (2022) |
| Salary | HK$1.7m | HK$1.7m | 93% |
| Other | HK$138k | HK$138k | 7% |
| Total Compensation | HK$1.9m | HK$1.8m | 100% |
Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. According to our research, EDICO Holdings has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
EDICO Holdings Limited's Growth
EDICO Holdings Limited has reduced its earnings per share by 25% a year over the last three years. In the last year, its revenue is down 12%.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has EDICO Holdings Limited Been A Good Investment?
Given the total shareholder loss of 7.0% over three years, many shareholders in EDICO Holdings Limited are probably rather dissatisfied, to say the least. 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.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for EDICO Holdings that investors should look into moving forward.
Important note: EDICO 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.