We Discuss Why King's Flair International (Holdings) Limited's (HKG:6822) CEO Compensation May Be Closely Reviewed

Key Insights

• King's Flair International (Holdings) to hold its Annual General Meeting on 31st of May
• CEO Alex Wong's total compensation includes salary of HK$5.04m
• Total compensation is 116% above industry average
• King's Flair International (Holdings)'s EPS declined by 75% over the past three years while total shareholder loss over the past three years was 63%

King's Flair International (Holdings) Limited (HKG:6822) has not performed well recently and CEO Alex Wong will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 31st of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for King's Flair International (Holdings)

Comparing King's Flair International (Holdings) Limited's CEO Compensation With The Industry

Our data indicates that King's Flair International (Holdings) Limited has a market capitalization of HK$305m, and total annual CEO compensation was reported as HK$5.0m for the year to December 2023. This was the same as last year. Notably, the salary of HK$5.0m is the entirety of the CEO compensation.

In comparison with other companies in the Hong Kong Consumer Durables industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.3m. Hence, we can conclude that Alex Wong is remunerated higher than the industry median. What's more, Alex Wong holds HK$183m 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$5.0m	HK$5.0m	100%
Other	-	-	-
Total Compensation	HK$5.0m	HK$5.0m	100%

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. On a company level, King's Flair International (Holdings) prefers to reward its CEO through a salary, opting not to pay Alex Wong through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

King's Flair International (Holdings) Limited's Growth

Over the last three years, King's Flair International (Holdings) Limited has shrunk its earnings per share by 75% per year. It saw its revenue drop 25% over the last 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. 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 King's Flair International (Holdings) Limited Been A Good Investment?

The return of -63% over three years would not have pleased King's Flair International (Holdings) Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

King's Flair International (Holdings) rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for King's Flair International (Holdings) (of which 2 are potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Important note: King's Flair International (Holdings) is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.