Here's Why We Think Pacific Legend Group Limited's (HKG:8547) CEO Compensation Looks Fair

Key Insights

• Pacific Legend Group's Annual General Meeting to take place on 28th of June
• CEO John Warren McLennan's total compensation includes salary of HK$752.0k
• Total compensation is 55% below industry average
• Pacific Legend Group's EPS grew by 19% over the past three years while total shareholder loss over the past three years was 93%

Shareholders may be wondering what CEO John Warren McLennan plans to do to improve the less than great performance at Pacific Legend Group Limited (HKG:8547) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 28th of June. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for Pacific Legend Group

Comparing Pacific Legend Group Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Pacific Legend Group Limited has a market capitalization of HK$29m, and reported total annual CEO compensation of HK$770k for the year to December 2023. Notably, that's a decrease of 60% over the year before. Notably, the salary which is HK$752.0k, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Specialty Retail industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.7m. Accordingly, Pacific Legend Group pays its CEO under the industry median.

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. Investors will find it interesting that Pacific Legend Group pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Pacific Legend Group Limited's Growth

Pacific Legend Group Limited has seen its earnings per share (EPS) increase by 19% a year over the past three years. Its revenue is up 23% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Pacific Legend Group Limited Been A Good Investment?

Few Pacific Legend Group Limited shareholders would feel satisfied with the return of -93% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

John Warren receives almost all of their compensation through a salary. The loss to shareholders over the past three years is certainly concerning. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for Pacific Legend Group (of which 3 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com