We Think Shareholders May Want To Consider A Review Of Cosmos Machinery Enterprises Limited's (HKG:118) CEO Compensation Package

Key Insights

• Cosmos Machinery Enterprises will host its Annual General Meeting on 18th of June
• Salary of HK$2.47m is part of CEO Freeman Tang's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Cosmos Machinery Enterprises' EPS fell by 69% and over the past three years, the total loss to shareholders 45%

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Cosmos Machinery Enterprises Limited (HKG:118) has not performed well recently and CEO Freeman Tang will probably need to up their game. At the upcoming AGM on 18th of June, shareholders can hear from the board including their plans for turning around performance. 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 Cosmos Machinery Enterprises

Comparing Cosmos Machinery Enterprises Limited's CEO Compensation With The Industry

According to our data, Cosmos Machinery Enterprises Limited has a market capitalization of HK$167m, and paid its CEO total annual compensation worth HK$3.0m over the year to December 2024. Notably, that's an increase of 11% over the year before. Notably, the salary which is HK$2.47m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Machinery industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.3m. So it looks like Cosmos Machinery Enterprises compensates Freeman Tang in line with the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	HK$2.5m	HK$2.1m	82%
Other	HK$544k	HK$625k	18%
Total Compensation	HK$3.0m	HK$2.7m	100%

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. There isn't a significant difference between Cosmos Machinery Enterprises and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Cosmos Machinery Enterprises Limited's Growth Numbers

Over the last three years, Cosmos Machinery Enterprises Limited has shrunk its earnings per share by 69% per year. Its revenue is up 8.2% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Cosmos Machinery Enterprises Limited Been A Good Investment?

Few Cosmos Machinery Enterprises Limited shareholders would feel satisfied with the return of -45% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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 Cosmos Machinery Enterprises that investors should think about before committing capital to this stock.

Switching gears from Cosmos Machinery Enterprises, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.