Key Insights

• Yangtzekiang Garment's Annual General Meeting to take place on 22nd of September
• Salary of HK$815.0k is part of CEO Suk Man Chan's total remuneration
• The overall pay is 59% below the industry average
• Yangtzekiang Garment's EPS grew by 87% over the past three years while total shareholder loss over the past three years was 36%

Performance at Yangtzekiang Garment Limited (HKG:294) has been rather uninspiring recently and shareholders may be wondering how CEO Suk Man Chan plans to fix this. At the next AGM coming up on 22nd of September, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

View our latest analysis for Yangtzekiang Garment

How Does Total Compensation For Suk Man Chan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Yangtzekiang Garment Limited has a market capitalization of HK$267m, and reported total annual CEO compensation of HK$855k for the year to March 2023. There was no change in the compensation compared to last year. We note that the salary portion, which stands at HK$815.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Luxury industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.1m. That is to say, Suk Man Chan is paid under the industry median. Moreover, Suk Man Chan also holds HK$4.4m worth of Yangtzekiang Garment 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 91% of total compensation represents salary and 9% is other remuneration. Investors will find it interesting that Yangtzekiang Garment pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. 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.

Yangtzekiang Garment Limited's Growth

Yangtzekiang Garment Limited has seen its earnings per share (EPS) increase by 87% a year over the past three years. Its revenue is down 6.3% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Yangtzekiang Garment Limited Been A Good Investment?

With a total shareholder return of -36% over three years, Yangtzekiang Garment Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Yangtzekiang Garment pays its CEO a majority of compensation through a salary. The fact that shareholders are sitting on a loss is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which can't be ignored) in Yangtzekiang Garment we think you should know about.

Important note: Yangtzekiang Garment 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.