A Look At TK Group (Holdings)'s (HKG:2283) CEO Remuneration

The CEO of TK Group (Holdings) Limited (HKG:2283) is Michael Yung, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for TK Group (Holdings)

Comparing TK Group (Holdings) Limited's CEO Compensation With the industry

According to our data, TK Group (Holdings) Limited has a market capitalization of HK$2.1b, and paid its CEO total annual compensation worth HK$5.5m over the year to December 2019. Notably, that's a decrease of 23% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$2.6m.

On examining similar-sized companies in the industry with market capitalizations between HK$775m and HK$3.1b, we discovered that the median CEO total compensation of that group was HK$2.6m. Accordingly, our analysis reveals that TK Group (Holdings) Limited pays Michael Yung north of the industry median. Moreover, Michael Yung also holds HK$142m worth of TK Group (Holdings) stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 86% of total compensation represents salary and 14% is other remuneration. It's interesting to note that TK Group (Holdings) allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

TK Group (Holdings) Limited's Growth

Over the last three years, TK Group (Holdings) Limited has shrunk its earnings per share by 1.4% per year. In the last year, its revenue is down 11%.

The lack of EPS growth is certainly unimpressive. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has TK Group (Holdings) Limited Been A Good Investment?

With a three year total loss of 39% for the shareholders, TK Group (Holdings) Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, TK Group (Holdings) Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good against shareholder returns, which have been negative for the past three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for TK Group (Holdings) that investors should look into moving forward.

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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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