Key Insights

• Continental Holdings will host its Annual General Meeting on 12th of December
• CEO Shirley Cheng's total compensation includes salary of HK$1.20m
• The overall pay is 42% below the industry average
• Continental Holdings' EPS declined by 78% over the past three years while total shareholder loss over the past three years was 58%

The underwhelming performance at Continental Holdings Limited (HKG:513) recently has probably not pleased shareholders. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 12th of December. The data we gathered below shows that CEO compensation looks acceptable for now.

Check out our latest analysis for Continental Holdings

How Does Total Compensation For Shirley Cheng Compare With Other Companies In The Industry?

According to our data, Continental Holdings Limited has a market capitalization of HK$165m, and paid its CEO total annual compensation worth HK$1.4m over the year to June 2023. This was the same amount the CEO received in the prior year. In particular, the salary of HK$1.20m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Luxury industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.4m. That is to say, Shirley Cheng is paid under the industry median.

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. There isn't a significant difference between Continental 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.

A Look at Continental Holdings Limited's Growth Numbers

Continental Holdings Limited has reduced its earnings per share by 78% a year over the last three years. Its revenue is down 25% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. 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 Continental Holdings Limited Been A Good Investment?

With a total shareholder return of -58% over three years, Continental Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Continental Holdings (2 don't sit too well with us!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.