Increases to i.century Holding Limited's (HKG:8507) CEO Compensation Might Cool off for now

Key Insights

• i.century Holding's Annual General Meeting to take place on 18th of September
• Total pay for CEO Wilson Leung includes HK$4.80m salary
• Total compensation is 130% above industry average
• i.century Holding's EPS grew by 64% over the past three years while total shareholder loss over the past three years was 25%

The underwhelming share price performance of i.century Holding Limited (HKG:8507) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 18th of September. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for i.century Holding

Comparing i.century Holding Limited's CEO Compensation With The Industry

Our data indicates that i.century Holding Limited has a market capitalization of HK$50m, and total annual CEO compensation was reported as HK$4.8m for the year to March 2023. That is, the compensation was roughly the same as last year. In particular, the salary of HK$4.80m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Luxury industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.1m. Hence, we can conclude that Wilson Leung is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	HK$4.8m	HK$4.8m	99%
Other	HK$36k	HK$35k	1%
Total Compensation	HK$4.8m	HK$4.8m	100%

Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 9% is other remuneration. i.century Holding 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.

i.century Holding Limited's Growth

i.century Holding Limited has seen its earnings per share (EPS) increase by 64% a year over the past three years. It saw its revenue drop 25% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has i.century Holding Limited Been A Good Investment?

With a three year total loss of 25% for the shareholders, i.century Holding Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Wilson receives almost all of their compensation through a salary. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for i.century Holding 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.