Most Shareholders Will Probably Agree With Kin Shing Holdings Limited's (HKG:1630) CEO Compensation

Performance at Kin Shing Holdings Limited (HKG:1630) has been rather uninspiring recently and shareholders may be wondering how CEO Dik Cheung Chow plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 13 August 2021. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Kin Shing Holdings

How Does Total Compensation For Dik Cheung Chow Compare With Other Companies In The Industry?

According to our data, Kin Shing Holdings Limited has a market capitalization of HK$152m, and paid its CEO total annual compensation worth HK$960k over the year to March 2021. That's mostly flat as compared to the prior year's compensation. In particular, the salary of HK$942.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.8m. In other words, Kin Shing Holdings pays its CEO lower than the industry median.

Component	2021	2020	Proportion (2021)
Salary	HK$942k	HK$952k	98%
Other	HK$18k	HK$18k	2%
Total Compensation	HK$960k	HK$970k	100%

Speaking on an industry level, nearly 90% of total compensation represents salary, while the remainder of 10% is other remuneration. Kin Shing Holdings has gone down a largely traditional route, paying Dik Cheung Chow a high salary, giving it preference over non-salary benefits. 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 Kin Shing Holdings Limited's Growth Numbers

Kin Shing Holdings Limited has reduced its earnings per share by 55% a year over the last three years. Its revenue is up 21% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Kin Shing Holdings Limited Been A Good Investment?

The return of -82% over three years would not have pleased Kin Shing Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Kin Shing Holdings pays its CEO a majority of compensation through a salary. The loss to shareholders over the past three years is certainly concerning. The downward trend in share price performance may be attributable to the the fact that earnings growth has gone backwards. 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. In our study, we found 4 warning signs for Kin Shing Holdings you should be aware of, and 2 of them make us uncomfortable.

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. 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.
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