Here's Why L.K. Technology Holdings Limited's (HKG:558) CEO May Have Their Pay Bumped Up

The decent performance at L.K. Technology Holdings Limited (HKG:558) recently will please most shareholders as they go into the AGM coming up on 03 September 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

View our latest analysis for L.K. Technology Holdings

How Does Total Compensation For Zhuo Ming Liu Compare With Other Companies In The Industry?

According to our data, L.K. Technology Holdings Limited has a market capitalization of HK$28b, and paid its CEO total annual compensation worth HK$1.4m over the year to March 2021. There was no change in the compensation compared to last year. We note that the salary portion, which stands at HK$1.40m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from HK$16b to HK$50b, the reported median CEO total compensation was HK$2.1m. This suggests that Zhuo Ming Liu is paid below the industry median.

Component	2021	2020	Proportion (2021)
Salary	HK$1.4m	HK$1.4m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$1.4m	HK$1.4m	100%

On an industry level, around 85% of total compensation represents salary and 15% is other remuneration. L.K. Technology Holdings has gone down a largely traditional route, paying Zhuo Ming Liu a high salary, giving it preference over non-salary benefits. 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 L.K. Technology Holdings Limited's Growth Numbers

L.K. Technology Holdings Limited has seen its earnings per share (EPS) increase by 9.9% a year over the past three years. Its revenue is up 46% over the last year.

We like the look of the strong year-on-year improvement in revenue. And in that context, the modest EPS improvement certainly isn't shabby. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has L.K. Technology Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 2,293% over three years, L.K. Technology Holdings Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Zhuo Ming receives almost all of their compensation through a salary. Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

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 3 warning signs for L.K. Technology Holdings that you should be aware of before investing.

Important note: L.K. Technology 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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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.
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