We Think Shareholders May Want To Consider A Review Of Kin Yat Holdings Limited's (HKG:638) CEO Compensation Package

Shareholders will probably not be too impressed with the underwhelming results at Kin Yat Holdings Limited (HKG:638) recently. At the upcoming AGM on 24 August 2021, shareholders can hear from the board including their plans for turning around performance. 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. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Kin Yat Holdings

Comparing Kin Yat Holdings Limited's CEO Compensation With the industry

Our data indicates that Kin Yat Holdings Limited has a market capitalization of HK$413m, and total annual CEO compensation was reported as HK$5.7m for the year to March 2021. We note that's a small decrease of 4.9% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$5.7m.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$3.5m. Accordingly, our analysis reveals that Kin Yat Holdings Limited pays Chor Kit Cheng north of the industry median. What's more, Chor Kit Cheng holds HK$266m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	HK$5.7m	HK$6.0m	100%
Other	-	-	-
Total Compensation	HK$5.7m	HK$6.0m	100%

Talking in terms of the industry, salary represented approximately 80% of total compensation out of all the companies we analyzed, while other remuneration made up 20% of the pie. At the company level, Kin Yat Holdings pays Chor Kit Cheng solely through a salary, preferring to go down a conventional route. 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 Kin Yat Holdings Limited's Growth Numbers

Kin Yat Holdings Limited has reduced its earnings per share by 12% a year over the last three years. Its revenue is down 13% 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Kin Yat Holdings Limited Been A Good Investment?

With a total shareholder return of -48% over three years, Kin Yat Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Kin Yat Holdings pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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 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 4 warning signs for Kin Yat Holdings that investors should look into moving forward.

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.
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