It Looks Like Wai Kee Holdings Limited's (HKG:610) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Wai Kee Holdings to hold its Annual General Meeting on 21st of May
• Total pay for CEO Derek Zen includes HK$9.58m salary
• Total compensation is 591% above industry average
• Over the past three years, Wai Kee Holdings' EPS fell by 112% and over the past three years, the total loss to shareholders 80%

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Wai Kee Holdings Limited (HKG:610) has not performed well recently and CEO Derek Zen will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 21st of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Wai Kee Holdings

Comparing Wai Kee Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Wai Kee Holdings Limited has a market capitalization of HK$492m, and reported total annual CEO compensation of HK$15m for the year to December 2024. That's slightly lower by 7.4% over the previous year. In particular, the salary of HK$9.58m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Construction industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.2m. Accordingly, our analysis reveals that Wai Kee Holdings Limited pays Derek Zen north of the industry median. Moreover, Derek Zen also holds HK$159m worth of Wai Kee Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	HK$9.6m	HK$9.4m	62%
Other	HK$5.9m	HK$7.3m	38%
Total Compensation	HK$15m	HK$17m	100%

On an industry level, around 85% of total compensation represents salary and 15% is other remuneration. It's interesting to note that Wai Kee Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Wai Kee Holdings Limited's Growth

Over the last three years, Wai Kee Holdings Limited has shrunk its earnings per share by 112% per year. In the last year, its revenue is up 14%.

The decline in EPS is a bit concerning. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Wai Kee Holdings Limited Been A Good Investment?

The return of -80% over three years would not have pleased Wai Kee Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Wai Kee Holdings you should be aware of, and 1 of them is concerning.

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.