It Looks Like Lumina Group Limited's (HKG:1162) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Lumina Group will host its Annual General Meeting on 15th of September
• Salary of HK$3.60m is part of CEO Hau Fai Fok's total remuneration
• The total compensation is 327% higher than the average for the industry
• Lumina Group's EPS declined by 147% over the past three years while total shareholder loss over the past three years was 25%

Shareholders will probably not be too impressed with the underwhelming results at Lumina Group Limited (HKG:1162) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 15th of September. 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.

View our latest analysis for Lumina Group

Comparing Lumina Group Limited's CEO Compensation With The Industry

According to our data, Lumina Group Limited has a market capitalization of HK$87m, and paid its CEO total annual compensation worth HK$7.9m over the year to March 2023. This was the same amount the CEO received in the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$3.6m.

On comparing similar-sized companies in the Hong Kong Commercial Services industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.9m. Hence, we can conclude that Hau Fai Fok is remunerated higher than the industry median. What's more, Hau Fai Fok holds HK$62m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	HK$3.6m	HK$3.6m	45%
Other	HK$4.3m	HK$4.3m	55%
Total Compensation	HK$7.9m	HK$7.9m	100%

Talking in terms of the industry, salary represented approximately 79% of total compensation out of all the companies we analyzed, while other remuneration made up 21% of the pie. Lumina Group pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Lumina Group Limited's Growth

Over the last three years, Lumina Group Limited has shrunk its earnings per share by 147% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is not a very positive result for shareholders. And the flat revenue is seriously uninspiring. 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 Lumina Group Limited Been A Good Investment?

Given the total shareholder loss of 25% over three years, many shareholders in Lumina Group Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Lumina Group (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

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.

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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.