Key Insights

• Hang Lung Group to hold its Annual General Meeting on 26th of April
• Salary of HK$20.6m is part of CEO Weber Lo's total remuneration
• Total compensation is 244% above industry average
• Hang Lung Group's EPS grew by 47% over the past three years while total shareholder loss over the past three years was 48%

Shareholders of Hang Lung Group Limited (HKG:10) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 26th of April could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

How Does Total Compensation For Weber Lo Compare With Other Companies In The Industry?

At the time of writing, our data shows that Hang Lung Group Limited has a market capitalization of HK$12b, and reported total annual CEO compensation of HK$34m for the year to December 2023. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at HK$20.6m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Real Estate industry with market capitalizations ranging from HK$7.8b to HK$25b, the reported median CEO total compensation was HK$9.7m. Accordingly, our analysis reveals that Hang Lung Group Limited pays Weber Lo north of the industry median. Furthermore, Weber Lo directly owns HK$4.1m worth of shares in the company.

Talking in terms of the industry, salary represented approximately 75% of total compensation out of all the companies we analyzed, while other remuneration made up 25% of the pie. In Hang Lung Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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.

Hang Lung Group Limited's Growth

Hang Lung Group Limited has seen its earnings per share (EPS) increase by 47% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Hang Lung Group Limited Been A Good Investment?

With a total shareholder return of -48% over three years, Hang Lung Group Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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. We did our research and spotted 1 warning sign for Hang Lung Group that investors should look into moving forward.

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.