It Looks Like Shareholders Would Probably Approve Kiddieland International Limited's (HKG:3830) CEO Compensation Package

It would be hard to discount the role that CEO Kenneth Lo has played in delivering the impressive results at Kiddieland International Limited (HKG:3830) recently. Coming up to the next AGM on 24 September 2021, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Check out our latest analysis for Kiddieland International

Comparing Kiddieland International Limited's CEO Compensation With the industry

According to our data, Kiddieland International Limited has a market capitalization of HK$147m, and paid its CEO total annual compensation worth HK$2.1m over the year to April 2021. Notably, that's a decrease of 8.7% over the year before. We note that the salary portion, which stands at HK$1.99m constitutes the majority of total compensation received by the CEO.

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$2.3m. So it looks like Kiddieland International compensates Kenneth Lo in line with the median for the industry.

Component	2021	2020	Proportion (2021)
Salary	HK$2.0m	HK$2.1m	94%
Other	HK$132k	HK$188k	6%
Total Compensation	HK$2.1m	HK$2.3m	100%

On an industry level, around 78% of total compensation represents salary and 22% is other remuneration. According to our research, Kiddieland International has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Kiddieland International Limited's Growth

Over the past three years, Kiddieland International Limited has seen its earnings per share (EPS) grow by 89% per year. Its revenue is up 9.3% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Kiddieland International Limited Been A Good Investment?

Most shareholders would probably be pleased with Kiddieland International Limited for providing a total return of 41% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 3 warning signs for Kiddieland International that investors should look into moving forward.

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.
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