Shareholders Will Most Likely Find Wecon Holdings Limited's (HKG:1793) CEO Compensation Acceptable

Key Insights

• Wecon Holdings to hold its Annual General Meeting on 21st of August
• CEO Ka Yip Tsang's total compensation includes salary of HK$2.15m
• The total compensation is similar to the average for the industry
• Wecon Holdings' EPS declined by 20% over the past three years while total shareholder return over the past three years was 53%

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The share price of Wecon Holdings Limited (HKG:1793) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. The upcoming AGM on 21st of August may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for Wecon Holdings

How Does Total Compensation For Ka Yip Tsang Compare With Other Companies In The Industry?

According to our data, Wecon Holdings Limited has a market capitalization of HK$188m, and paid its CEO total annual compensation worth HK$2.5m over the year to March 2025. We note that's an increase of 11% above last year. We note that the salary portion, which stands at HK$2.15m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.5m. From this we gather that Ka Yip Tsang is paid around the median for CEOs in the industry. Moreover, Ka Yip Tsang also holds HK$141m worth of Wecon Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. Our data reveals that Wecon Holdings allocates salary more or less in line with the wider market. 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 Wecon Holdings Limited's Growth Numbers

Wecon Holdings Limited has reduced its earnings per share by 20% a year over the last three years. It saw its revenue drop 8.8% over the last 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Wecon Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with Wecon Holdings Limited for providing a total return of 53% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with 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 did our research and identified 3 warning signs (and 1 which is significant) in Wecon Holdings we think you should know about.

Important note: Wecon Holdings 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.