Build King Holdings Limited's (HKG:240) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Build King Holdings will host its Annual General Meeting on 21st of May
• CEO Derek Zen's total compensation includes salary of HK$8.83m
• The total compensation is 495% higher than the average for the industry
• Build King Holdings' EPS grew by 14% over the past three years while total shareholder return over the past three years was 88%

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CEO Derek Zen has done a decent job of delivering relatively good performance at Build King Holdings Limited (HKG:240) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 21st of May. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Build King Holdings

How Does Total Compensation For Derek Zen Compare With Other Companies In The Industry?

At the time of writing, our data shows that Build King Holdings Limited has a market capitalization of HK$1.4b, and reported total annual CEO compensation of HK$15m for the year to December 2024. That's a slight decrease of 7.9% on the prior year. In particular, the salary of HK$8.83m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the Hong Kong Construction industry with market capitalizations between HK$780m and HK$3.1b, we discovered that the median CEO total compensation of that group was HK$2.5m. This suggests that Derek Zen is paid more than the median for the industry. What's more, Derek Zen holds HK$141m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	HK$8.8m	HK$8.7m	60%
Other	HK$5.8m	HK$7.3m	40%
Total Compensation	HK$15m	HK$16m	100%

On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. In Build King Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 Build King Holdings Limited's Growth Numbers

Over the past three years, Build King Holdings Limited has seen its earnings per share (EPS) grow by 14% per year. In the last year, its revenue is up 15%.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Build King Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with Build King Holdings Limited for providing a total return of 88% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Build King Holdings that investors should think about before committing capital to this stock.

Switching gears from Build King 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.