Shareholders Will Likely Find Nayuki Holdings Limited's (HKG:2150) CEO Compensation Acceptable

Key Insights

• Nayuki Holdings to hold its Annual General Meeting on 27th of June
• Salary of CN¥1.26m is part of CEO Lin Zhao's total remuneration
• Total compensation is 33% below industry average
• Nayuki Holdings' EPS grew by 91% over the past three years while total shareholder loss over the past three years was 84%

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Performance at Nayuki Holdings Limited (HKG:2150) has been rather uninspiring recently and shareholders may be wondering how CEO Lin Zhao 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 27th of June. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for Nayuki Holdings

Comparing Nayuki Holdings Limited's CEO Compensation With The Industry

Our data indicates that Nayuki Holdings Limited has a market capitalization of HK$1.9b, and total annual CEO compensation was reported as CN¥1.4m for the year to December 2024. Notably, that's a decrease of 19% over the year before. We note that the salary portion, which stands at CN¥1.26m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Hospitality industry with market capitalizations ranging from HK$785m to HK$3.1b, the reported median CEO total compensation was CN¥2.0m. That is to say, Lin Zhao is paid under the industry median.

Talking in terms of the industry, salary represented approximately 83% of total compensation out of all the companies we analyzed, while other remuneration made up 17% of the pie. It's interesting to note that Nayuki Holdings pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Nayuki Holdings Limited's Growth

Over the past three years, Nayuki Holdings Limited has seen its earnings per share (EPS) grow by 91% per year. In the last year, its revenue is down 4.7%.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Nayuki Holdings Limited Been A Good Investment?

With a total shareholder return of -84% over three years, Nayuki 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...

The fact that shareholders are sitting on a loss is certainly disheartening. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

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. That's why we did some digging and identified 1 warning sign for Nayuki Holdings that investors should think about before committing capital to this stock.

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.