Here's Why It's Unlikely That Ka Shui International Holdings Limited's (HKG:822) CEO Will See A Pay Rise This Year

Key Insights

• Ka Shui International Holdings to hold its Annual General Meeting on 31st of May
• Salary of HK$2.11m is part of CEO Weiman Chu's total remuneration
• The total compensation is similar to the average for the industry
• Ka Shui International Holdings' EPS declined by 57% over the past three years while total shareholder loss over the past three years was 47%

The results at Ka Shui International Holdings Limited (HKG:822) have been quite disappointing recently and CEO Weiman Chu bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 31st of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Ka Shui International Holdings

How Does Total Compensation For Weiman Chu Compare With Other Companies In The Industry?

Our data indicates that Ka Shui International Holdings Limited has a market capitalization of HK$259m, and total annual CEO compensation was reported as HK$2.1m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$2.1m.

On comparing similar-sized companies in the Hong Kong Machinery industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.0m. From this we gather that Weiman Chu is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	HK$2.1m	HK$1.8m	100%
Other	-	HK$302k	-
Total Compensation	HK$2.1m	HK$2.1m	100%

On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. Speaking on a company level, Ka Shui International Holdings prefers to tread along a traditional path, disbursing all compensation through a salary. 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 Ka Shui International Holdings Limited's Growth Numbers

Over the last three years, Ka Shui International Holdings Limited has shrunk its earnings per share by 57% per year. It saw its revenue drop 15% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. 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 Ka Shui International Holdings Limited Been A Good Investment?

Few Ka Shui International Holdings Limited shareholders would feel satisfied with the return of -47% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Ka Shui International Holdings rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in Ka Shui International Holdings we think you should know about.

Switching gears from Ka Shui International Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.