The CEO of Lee Kee Holdings Limited (HKG:637) is Clara Chan, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Lee Kee Holdings.
See our latest analysis for Lee Kee Holdings
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$278m, and total annual CEO compensation was reported as HK$3.1m for the year to March 2020. That is, the compensation was roughly the same as last year. Notably, the salary which is HK$2.47m, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.3m. This suggests that Clara Chan is paid more than the median for the industry.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$2.5m | HK$2.4m | 79% |
| Other | HK$654k | HK$654k | 21% |
| Total Compensation | HK$3.1m | HK$3.1m | 100% |
Talking in terms of the industry, salary represented approximately 92% of total compensation out of all the companies we analyzed, while other remuneration made up 7.6% of the pie. Lee Kee Holdings pays a modest slice of remuneration through salary, as compared 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.
Lee Kee Holdings Limited's Growth
Over the last three years, Lee Kee Holdings Limited has shrunk its earnings per share by 91% per year. Its revenue is down 16% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Lee Kee Holdings Limited Been A Good Investment?
Since shareholders would have lost about 47% over three years, some Lee Kee Holdings Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As we noted earlier, Lee Kee Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. To make matters worse, EPS growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Lee Kee Holdings (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.
Important note: Lee Kee 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.
If you decide to trade Lee Kee Holdings, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted
New: AI Stock Screener & Alerts
Our new AI Stock Screener scans the market every day to uncover opportunities.
• Dividend Powerhouses (3%+ Yield)
• Undervalued Small Caps with Insider Buying
• High growth Tech and AI Companies
Or build your own from over 50 metrics.
This article by Simply Wall St is general in nature. 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.
About SEHK:637
Lee Kee Holdings
An investment holding company, engages in the trading of non-ferrous metals in Hong Kong and Mainland China.
Flawless balance sheet and good value.
