Shareholders May Not Be So Generous With Lonking Holdings Limited's (HKG:3339) CEO Compensation And Here's Why

Key Insights

• Lonking Holdings will host its Annual General Meeting on 28th of May
• CEO San Yim Li's total compensation includes salary of CN¥6.84m
• The overall pay is 149% above the industry average
• Lonking Holdings' EPS declined by 7.2% over the past three years while total shareholder return over the past three years was 17%

Our free stock report includes 1 warning sign investors should be aware of before investing in Lonking Holdings. Read for free now.

Despite Lonking Holdings Limited's (HKG:3339) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. The upcoming AGM on 28th of May may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for Lonking Holdings

How Does Total Compensation For San Yim Li Compare With Other Companies In The Industry?

Our data indicates that Lonking Holdings Limited has a market capitalization of HK$8.8b, and total annual CEO compensation was reported as CN¥8.5m for the year to December 2024. That's slightly lower by 6.0% over the previous year. Notably, the salary which is CN¥6.84m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Machinery industry with market capitalizations ranging between HK$3.1b and HK$13b had a median total CEO compensation of CN¥3.4m. This suggests that San Yim Li is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	CN¥6.8m	CN¥6.8m	81%
Other	CN¥1.6m	CN¥2.2m	19%
Total Compensation	CN¥8.5m	CN¥9.0m	100%

On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. Our data reveals that Lonking Holdings allocates salary more or less in line with the wider market. 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 Lonking Holdings Limited's Growth Numbers

Lonking Holdings Limited has reduced its earnings per share by 7.2% a year over the last three years. Its revenue is down 2.9% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Lonking Holdings Limited Been A Good Investment?

Lonking Holdings Limited has generated a total shareholder return of 17% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Lonking Holdings that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.