Kidztech Holdings Limited's (HKG:6918) CEO Will Probably Struggle To See A Pay Rise This Year

Key Insights

• Kidztech Holdings will host its Annual General Meeting on 16th of August
• Salary of CN¥1.00m is part of CEO Huang Yu's total remuneration
• The total compensation is 36% less than the average for the industry
• Kidztech Holdings' EPS declined by 103% over the past three years while total shareholder loss over the past three years was 89%

The disappointing performance at Kidztech Holdings Limited (HKG:6918) 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 16th of August. From our analysis below, we think CEO compensation looks appropriate for now.

Check out our latest analysis for Kidztech Holdings

Comparing Kidztech Holdings Limited's CEO Compensation With The Industry

Our data indicates that Kidztech Holdings Limited has a market capitalization of HK$106m, and total annual CEO compensation was reported as CN¥1.0m for the year to December 2023. We note that's an increase of 18% above last year. Notably, the salary which is CN¥1.00m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Leisure industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.6m. In other words, Kidztech Holdings pays its CEO lower than the industry median. Furthermore, Huang Yu directly owns HK$35m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.0m	CN¥840k	98%
Other	CN¥16k	CN¥18k	2%
Total Compensation	CN¥1.0m	CN¥858k	100%

Speaking on an industry level, nearly 92% of total compensation represents salary, while the remainder of 8% is other remuneration. Investors will find it interesting that Kidztech Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. 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.

Kidztech Holdings Limited's Growth

Kidztech Holdings Limited has reduced its earnings per share by 103% a year over the last three years. It saw its revenue drop 22% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Kidztech Holdings Limited Been A Good Investment?

The return of -89% over three years would not have pleased Kidztech Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Kidztech Holdings pays its CEO a majority of compensation through a salary. 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 pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for Kidztech Holdings (of which 2 are significant!) that you should know about in order to have a holistic understanding of the stock.

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.