This Is Why Kin Shing Holdings Limited's (HKG:1630) CEO Compensation Looks Appropriate

Key Insights

• Kin Shing Holdings' Annual General Meeting to take place on 16th of August
• Total pay for CEO Dik Cheung Chow includes HK$1.11m salary
• The total compensation is 50% less than the average for the industry
• Kin Shing Holdings' three-year loss to shareholders was 76% while its EPS was down 51% over the past three years

The performance at Kin Shing Holdings Limited (HKG:1630) has been rather lacklustre of late and shareholders may be wondering what CEO Dik Cheung Chow is planning to do about this. 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 16th of August. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Kin Shing Holdings

Comparing Kin Shing Holdings Limited's CEO Compensation With The Industry

Our data indicates that Kin Shing Holdings Limited has a market capitalization of HK$38m, and total annual CEO compensation was reported as HK$1.1m for the year to March 2024. That's just a smallish increase of 4.0% on last year. In particular, the salary of HK$1.11m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.3m. Accordingly, Kin Shing Holdings pays its CEO under the industry median.

Component	2024	2023	Proportion (2024)
Salary	HK$1.1m	HK$1.1m	98%
Other	HK$18k	HK$18k	2%
Total Compensation	HK$1.1m	HK$1.1m	100%

Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. Kin Shing Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to 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.

Kin Shing Holdings Limited's Growth

Over the last three years, Kin Shing Holdings Limited has shrunk its earnings per share by 51% per year. It achieved revenue growth of 162% over the last year.

The decrease in EPS could be a concern for some investors. 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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Kin Shing Holdings Limited Been A Good Investment?

Few Kin Shing Holdings Limited shareholders would feel satisfied with the return of -76% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Kin Shing Holdings pays its CEO a majority of compensation through a salary. The fact that shareholders are sitting on a loss is certainly disheartening. The poor performance of the share price might have something to do with the lack of earnings growth. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Kin Shing Holdings that investors should think about before committing capital to this stock.

Switching gears from Kin Shing Holdings, 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.