Here's Why Shareholders May Want To Be Cautious With Increasing Hung Hing Printing Group Limited's (HKG:450) CEO Pay Packet

Key Insights

• Hung Hing Printing Group to hold its Annual General Meeting on 27th of May
• Total pay for CEO Matthew Yum includes HK$5.04m salary
• The total compensation is 214% higher than the average for the industry
• Hung Hing Printing Group's EPS declined by 2.7% over the past three years while total shareholder return over the past three years was 15%

The share price of Hung Hing Printing Group Limited (HKG:450) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. The upcoming AGM on 27th of May may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Hung Hing Printing Group

How Does Total Compensation For Matthew Yum Compare With Other Companies In The Industry?

Our data indicates that Hung Hing Printing Group Limited has a market capitalization of HK$943m, and total annual CEO compensation was reported as HK$5.7m for the year to December 2024. That's a notable decrease of 10% on last year. In particular, the salary of HK$5.04m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Packaging industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.8m. Hence, we can conclude that Matthew Yum is remunerated higher than the industry median. What's more, Matthew Yum holds HK$60m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 74% of total compensation represents salary, while the remainder of 26% is other remuneration. According to our research, Hung Hing Printing Group 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.

Hung Hing Printing Group Limited's Growth

Over the last three years, Hung Hing Printing Group Limited has shrunk its earnings per share by 2.7% per year. In the last year, its revenue is down 8.0%.

A lack of EPS improvement is not good to see. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Hung Hing Printing Group Limited Been A Good Investment?

Hung Hing Printing Group Limited has served shareholders reasonably well, with a total return of 15% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

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 2 warning signs for Hung Hing Printing Group that investors should look into moving forward.

Important note: Hung Hing Printing 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.

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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.