Leader Education Limited's (HKG:1449) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• Leader Education to hold its Annual General Meeting on 24th of February
• Total pay for CEO Laixiang Liu includes CN¥500.0k salary
• The overall pay is 37% below the industry average
• Over the past three years, Leader Education's EPS fell by 27% and over the past three years, the total loss to shareholders 10%

Performance at Leader Education Limited (HKG:1449) has been rather uninspiring recently and shareholders may be wondering how CEO Laixiang Liu plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 24th of February. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Leader Education

How Does Total Compensation For Laixiang Liu Compare With Other Companies In The Industry?

Our data indicates that Leader Education Limited has a market capitalization of HK$180m, and total annual CEO compensation was reported as CN¥1.4m for the year to August 2024. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥500k.

For comparison, other companies in the Hong Kong Consumer Services industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥2.1m. Accordingly, Leader Education pays its CEO under the industry median. Moreover, Laixiang Liu also holds HK$53m worth of Leader Education stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	CN¥500k	CN¥500k	37%
Other	CN¥852k	CN¥855k	63%
Total Compensation	CN¥1.4m	CN¥1.4m	100%

Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. In Leader Education's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Leader Education Limited's Growth Numbers

Leader Education Limited has reduced its earnings per share by 27% a year over the last three years. In the last year, its revenue is up 17%.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Leader Education Limited Been A Good Investment?

Given the total shareholder loss of 10% over three years, many shareholders in Leader Education Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The decline in share price is rather disappointing to shareholders. One reason for the lacklustre price performance could be that earnings just haven't grown much. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board and assess if the board's plan is likely to improve company performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for Leader Education you should be aware of, and 1 of them makes us a bit uncomfortable.

Important note: Leader Education 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.