Shareholders Will Likely Find Dragon Rise Group Holdings Limited's (HKG:6829) CEO Compensation Acceptable

Performance at Dragon Rise Group Holdings Limited (HKG:6829) has been rather uninspiring recently and shareholders may be wondering how CEO Yuk-Kit Yip plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 13 August 2021. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for Dragon Rise Group Holdings

How Does Total Compensation For Yuk-Kit Yip Compare With Other Companies In The Industry?

Our data indicates that Dragon Rise Group Holdings Limited has a market capitalization of HK$162m, and total annual CEO compensation was reported as HK$957k for the year to March 2021. We note that's an increase of 14% above last year. Notably, the salary which is HK$876.0k, represents most 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$1.8m. This suggests that Yuk-Kit Yip is paid below the industry median. What's more, Yuk-Kit Yip holds HK$120m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	HK$876k	HK$756k	92%
Other	HK$81k	HK$81k	8%
Total Compensation	HK$957k	HK$837k	100%

Talking in terms of the industry, salary represented approximately 90% of total compensation out of all the companies we analyzed, while other remuneration made up 10% of the pie. There isn't a significant difference between Dragon Rise Group Holdings and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Dragon Rise Group Holdings Limited's Growth Numbers

Over the last three years, Dragon Rise Group Holdings Limited has shrunk its earnings per share by 121% per year. In the last year, its revenue is up 81%.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Dragon Rise Group Holdings Limited Been A Good Investment?

Few Dragon Rise Group Holdings Limited shareholders would feel satisfied with the return of -64% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders have earned a negative share price return is certainly disconcerting. The downward trend in share price performance may be attributable to the the fact that earnings growth has gone backwards. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with 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 3 warning signs for Dragon Rise Group Holdings you should be aware of, and 1 of them is a bit unpleasant.

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. 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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