Steve Leung Design Group Limited's (HKG:2262) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• Steve Leung Design Group to hold its Annual General Meeting on 29th of May
• CEO Kenny Siu's total compensation includes salary of HK$3.60m
• The total compensation is similar to the average for the industry
• Over the past three years, Steve Leung Design Group's EPS fell by 15% and over the past three years, the total shareholder return was 54%

Our free stock report includes 1 warning sign investors should be aware of before investing in Steve Leung Design Group. Read for free now.

The share price of Steve Leung Design Group Limited (HKG:2262) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 29th of May. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Steve Leung Design Group

Comparing Steve Leung Design Group Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Steve Leung Design Group Limited has a market capitalization of HK$1.2b, and reported total annual CEO compensation of HK$4.2m for the year to December 2024. We note that's an increase of 15% above last year. We note that the salary portion, which stands at HK$3.60m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the Hong Kong Consumer Services industry with market caps ranging from HK$783m to HK$3.1b, we found that the median CEO total compensation was HK$3.7m. From this we gather that Kenny Siu is paid around the median for CEOs in the industry.

Component	2024	2023	Proportion (2024)
Salary	HK$3.6m	HK$3.2m	85%
Other	HK$627k	HK$447k	15%
Total Compensation	HK$4.2m	HK$3.7m	100%

Talking in terms of the industry, salary represented approximately 81% of total compensation out of all the companies we analyzed, while other remuneration made up 19% of the pie. Although there is a difference in how total compensation is set, Steve Leung Design Group more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Steve Leung Design Group Limited's Growth

Over the last three years, Steve Leung Design Group Limited has shrunk its earnings per share by 15% per year. In the last year, its revenue is up 3.3%.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Steve Leung Design Group Limited Been A Good Investment?

We think that the total shareholder return of 54%, over three years, would leave most Steve Leung Design Group Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Steve Leung Design Group that investors should look into moving forward.

Important note: Steve Leung Design Group 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.