Key Insights
- Forward Fashion (International) Holdings will host its Annual General Meeting on 6th of June
- CEO Xingyi Chen’s total compensation includes salary of HK$1.32m
- The overall pay is comparable to the industry average
- Over the past three years, Forward Fashion (International) Holdings’ EPS grew by 51% and over the past three years, the total loss to shareholders 74%
Shareholders of Forward Fashion (International) Holdings Company Limited (HKG:2528) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 6th of June could be an opportunity for shareholders to bring these concerns to the board’s attention. They could also influence management through voting on resolutions such as executive remuneration. Here’s our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Forward Fashion (International) Holdings
How Does Total Compensation For Xingyi Chen Compare With Other Companies In The Industry?
According to our data, Forward Fashion (International) Holdings Company Limited has a market capitalization of HK$96m, and paid its CEO total annual compensation worth HK$1.4m over the year to December 2023. That’s a notable decrease of 18% on last year. Notably, the salary which is HK$1.32m, represents most of the total compensation being paid.
For comparison, other companies in the Hong Kong Specialty Retail industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.8m. So it looks like Forward Fashion (International) Holdings compensates Xingyi Chen in line with the median for the industry.
| Component | 2023 | 2022 | Proportion (2023) |
| Salary | HK$1.3m | HK$1.6m | 92% |
| Other | HK$107k | HK$106k | 8% |
| Total Compensation | HK$1.4m | HK$1.7m | 100% |
On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. There isn’t a significant difference between Forward Fashion (International) Holdings and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Forward Fashion (International) Holdings Company Limited’s Growth Numbers
Forward Fashion (International) Holdings Company Limited’s earnings per share (EPS) grew 51% per year over the last three years. It achieved revenue growth of 5.0% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Forward Fashion (International) Holdings Company Limited Been A Good Investment?
The return of -74% over three years would not have pleased Forward Fashion (International) Holdings Company Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude…
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what’s holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Forward Fashion (International) Holdings (1 is potentially serious!) that you should be aware of before investing here.
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.
Valuation is complex, but we’re helping make it simple.
Find out whether Forward Fashion (International) Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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.