Should Shareholders Have Second Thoughts About A Pay Rise For Kasen International Holdings Limited's (HKG:496) CEO This Year?

Key Insights

• Kasen International Holdings to hold its Annual General Meeting on 30th of May
• Salary of CN¥545.0k is part of CEO Kasen Zhu's total remuneration
• The overall pay is 74% below the industry average
• Kasen International Holdings' three-year loss to shareholders was 32% while its EPS was down 33% over the past three years

Our free stock report includes 2 warning signs investors should be aware of before investing in Kasen International Holdings. Read for free now.

The disappointing performance at Kasen International Holdings Limited (HKG:496) will make some shareholders rather disheartened. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 30th of May. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

See our latest analysis for Kasen International Holdings

How Does Total Compensation For Kasen Zhu Compare With Other Companies In The Industry?

Our data indicates that Kasen International Holdings Limited has a market capitalization of HK$491m, and total annual CEO compensation was reported as CN¥562k for the year to December 2024. That's a notable decrease of 45% on last year. Notably, the salary which is CN¥545.0k, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Consumer Durables industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥2.2m. In other words, Kasen International Holdings pays its CEO lower than the industry median. Furthermore, Kasen Zhu directly owns HK$327m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	CN¥545k	CN¥1.0m	97%
Other	CN¥17k	CN¥11k	3%
Total Compensation	CN¥562k	CN¥1.0m	100%

On an industry level, around 78% of total compensation represents salary and 22% is other remuneration. Kasen International Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. 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 Kasen International Holdings Limited's Growth Numbers

Kasen International Holdings Limited has reduced its earnings per share by 33% a year over the last three years. Its revenue is up 7.2% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Kasen International Holdings Limited Been A Good Investment?

The return of -32% over three years would not have pleased Kasen International Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Kasen receives almost all of their compensation through a salary. 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Kasen International Holdings (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

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. 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.