This Is Why Shareholders May Want To Hold Back On A Pay Rise For Watts International Maritime Company Limited's (HKG:2258) CEO

Key Insights

• Watts International Maritime's Annual General Meeting to take place on 24th of June
• CEO Yun Wan's total compensation includes salary of CN¥556.0k
• The total compensation is 37% less than the average for the industry
• Watts International Maritime's EPS declined by 102% over the past three years while total shareholder loss over the past three years was 29%

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Performance at Watts International Maritime Company Limited (HKG:2258) has not been particularly rosy recently and shareholders will likely be holding CEO Yun Wan and the board accountable for this. The next AGM coming up on 24th of June will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. The data we gathered below shows that CEO compensation looks acceptable for now.

See our latest analysis for Watts International Maritime

How Does Total Compensation For Yun Wan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Watts International Maritime Company Limited has a market capitalization of HK$161m, and reported total annual CEO compensation of CN¥1.3m for the year to December 2024. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥556k.

In comparison with other companies in the Hong Kong Construction industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥2.1m. Accordingly, Watts International Maritime pays its CEO under the industry median. Moreover, Yun Wan also holds HK$5.2m worth of Watts International Maritime stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. Watts International Maritime sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Watts International Maritime Company Limited's Growth

Watts International Maritime Company Limited has reduced its earnings per share by 102% a year over the last three years. Its revenue is down 28% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Watts International Maritime Company Limited Been A Good Investment?

Since shareholders would have lost about 29% over three years, some Watts International Maritime Company Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

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, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which is concerning) in Watts International Maritime we think you should know about.

Switching gears from Watts International Maritime, 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.

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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.