Shareholders will probably not be too impressed with the underwhelming results at Lee Kee Holdings Limited (HKG:637) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 23 August 2021. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.
Comparing Lee Kee Holdings Limited's CEO Compensation With the industry
Our data indicates that Lee Kee Holdings Limited has a market capitalization of HK$269m, and total annual CEO compensation was reported as HK$2.7m for the year to March 2021. That's a notable decrease of 13% on last year. Notably, the salary which is HK$1.48m, 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$2.5m. This suggests that Lee Kee Holdings remunerates its CEO largely in line with the industry average.
On an industry level, around 86% of total compensation represents salary and 14% is other remuneration. Lee Kee Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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 Lee Kee Holdings Limited's Growth Numbers
Over the last three years, Lee Kee Holdings Limited has shrunk its earnings per share by 43% per year. Its revenue is up 4.7% over the last year.
Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Lee Kee Holdings Limited Been A Good Investment?
Few Lee Kee Holdings Limited shareholders would feel satisfied with the return of -37% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 4 warning signs for Lee Kee Holdings that investors should look into moving forward.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
If you’re looking to trade a wide range of investments, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.