Shui Wah Lam is the CEO of LKS Holding Group Limited (HKG:1867), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether LKS Holding Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for LKS Holding Group
How Does Total Compensation For Shui Wah Lam Compare With Other Companies In The Industry?
At the time of writing, our data shows that LKS Holding Group Limited has a market capitalization of HK$108m, and reported total annual CEO compensation of HK$1.5m for the year to March 2020. Notably, that's a decrease of 22% over the year before. We note that the salary portion, which stands at HK$1.44m constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.5m. So it looks like LKS Holding Group compensates Shui Wah Lam in line with the median for the industry. Furthermore, Shui Wah Lam directly owns HK$40m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$1.4m | HK$1.4m | 95% |
| Other | HK$78k | HK$498k | 5% |
| Total Compensation | HK$1.5m | HK$1.9m | 100% |
On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. There isn't a significant difference between LKS Holding Group and the broader market, in terms of salary allocation in the overall compensation package. 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 LKS Holding Group Limited's Growth Numbers
Over the last three years, LKS Holding Group Limited has shrunk its earnings per share by 51% per year. Its revenue is down 19% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 LKS Holding Group Limited Been A Good Investment?
Since shareholders would have lost about 36% over three years, some LKS Holding Group Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we touched on above, LKS Holding Group Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
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. In our study, we found 3 warning signs for LKS Holding Group you should be aware of, and 1 of them doesn't sit too well with us.
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. 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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About SEHK:1867
Standard Development Group
An investment holding company, engages in the interior fitting-out, renovation, alteration, and addition works for properties in Mainland China and Hong Kong.
Mediocre balance sheet very low.
