How Much Is Lap Kei Engineering (Holdings)'s (HKG:1690) CEO Getting Paid?

The CEO of Lap Kei Engineering (Holdings) Limited (HKG:1690) is Kang Kwong Wong, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Lap Kei Engineering (Holdings) pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Lap Kei Engineering (Holdings)

How Does Total Compensation For Kang Kwong Wong Compare With Other Companies In The Industry?

According to our data, Lap Kei Engineering (Holdings) Limited has a market capitalization of HK$80m, and paid its CEO total annual compensation worth HK$2.2m over the year to December 2019. That's a modest increase of 4.3% on the prior year. Notably, the salary which is HK$2.16m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.9m. From this we gather that Kang Kwong Wong is paid around the median for CEOs in the industry. What's more, Kang Kwong Wong holds HK$7.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 91% of total compensation represents salary and 8.7% is other remuneration. Lap Kei Engineering (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 dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Lap Kei Engineering (Holdings) Limited's Growth Numbers

Over the last three years, Lap Kei Engineering (Holdings) Limited has shrunk its earnings per share by 107% per year. In the last year, its revenue is down 48%.

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. 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 Lap Kei Engineering (Holdings) Limited Been A Good Investment?

Since shareholders would have lost about 68% over three years, some Lap Kei Engineering (Holdings) Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Kang Kwong receives almost all of their compensation through a salary. As previously discussed, Kang Kwong is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

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 3 warning signs for Lap Kei Engineering (Holdings) you should be aware of, and 1 of them is concerning.

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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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