Key Insights

• Sam Woo Construction Group's Annual General Meeting to take place on 20th of September
• Total pay for CEO Chun Kwok Lau includes HK$910.0k salary
• The total compensation is similar to the average for the industry
• Sam Woo Construction Group's EPS declined by 98% over the past three years while total shareholder loss over the past three years was 59%

Shareholders will probably not be too impressed with the underwhelming results at Sam Woo Construction Group Limited (HKG:3822) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 20th of September. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Sam Woo Construction Group

How Does Total Compensation For Chun Kwok Lau Compare With Other Companies In The Industry?

According to our data, Sam Woo Construction Group Limited has a market capitalization of HK$76m, and paid its CEO total annual compensation worth HK$1.5m over the year to March 2023. This was the same amount the CEO received in the prior year. In particular, the salary of HK$910.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.1m. This suggests that Sam Woo Construction Group remunerates its CEO largely in line with the industry average.

Speaking on an industry level, nearly 88% of total compensation represents salary, while the remainder of 12% is other remuneration. It's interesting to note that Sam Woo Construction Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Sam Woo Construction Group Limited's Growth Numbers

Over the last three years, Sam Woo Construction Group Limited has shrunk its earnings per share by 98% per year. Its revenue is up 15% over the last year.

Overall this is not a very positive result for shareholders. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Sam Woo Construction Group Limited Been A Good Investment?

The return of -59% over three years would not have pleased Sam Woo Construction Group Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 2 warning signs for Sam Woo Construction Group that investors should think about before committing capital to this stock.

Important note: Sam Woo Construction Group 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.

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.