Increases to CEO Compensation Might Be Put On Hold For Now at KPa-BM Holdings Limited (HKG:2663)

By
Simply Wall St
Published
August 13, 2021
SEHK:2663
Source: Shutterstock

Under the guidance of CEO Yat Kin Wai, KPa-BM Holdings Limited (HKG:2663) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 20 August 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for KPa-BM Holdings

Comparing KPa-BM Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that KPa-BM Holdings Limited has a market capitalization of HK$246m, and reported total annual CEO compensation of HK$4.9m for the year to March 2021. We note that's a decrease of 13% compared to last year. Notably, the salary which is HK$2.93m, represents a considerable chunk of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.8m. Hence, we can conclude that Yat Kin Wai is remunerated higher than the industry median. Furthermore, Yat Kin Wai directly owns HK$13m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20212020Proportion (2021)
Salary HK$2.9m HK$2.7m 59%
Other HK$2.0m HK$3.0m 41%
Total CompensationHK$4.9m HK$5.7m100%

On an industry level, roughly 90% of total compensation represents salary and 10% is other remuneration. It's interesting to note that KPa-BM Holdings allocates a smaller portion of compensation to salary 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.

ceo-compensation
SEHK:2663 CEO Compensation August 13th 2021

A Look at KPa-BM Holdings Limited's Growth Numbers

Over the past three years, KPa-BM Holdings Limited has seen its earnings per share (EPS) grow by 24% per year. It saw its revenue drop 37% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 KPa-BM Holdings Limited Been A Good Investment?

KPa-BM Holdings Limited has generated a total shareholder return of 3.4% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

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 KPa-BM Holdings you should be aware of, and 1 of them is a bit unpleasant.

Important note: KPa-BM Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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