Century City International Holdings Limited's (HKG:355) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Century City International Holdings to hold its Annual General Meeting on 13th of June
• Salary of HK$15.2m is part of CEO Yuk Sui Lo's total remuneration
• The overall pay is 729% above the industry average
• Over the past three years, Century City International Holdings' EPS fell by 18% and over the past three years, the total loss to shareholders 53%

The results at Century City International Holdings Limited (HKG:355) have been quite disappointing recently and CEO Yuk Sui Lo bears some responsibility for this. At the upcoming AGM on 13th of June, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Century City International Holdings

Comparing Century City International Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Century City International Holdings Limited has a market capitalization of HK$631m, and reported total annual CEO compensation of HK$18m for the year to December 2023. That's a slight decrease of 3.0% on the prior year. In particular, the salary of HK$15.2m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Hospitality industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.1m. Accordingly, our analysis reveals that Century City International Holdings Limited pays Yuk Sui Lo north of the industry median. Furthermore, Yuk Sui Lo directly owns HK$425m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	HK$15m	HK$15m	87%
Other	HK$2.3m	HK$3.2m	13%
Total Compensation	HK$18m	HK$18m	100%

On an industry level, around 87% of total compensation represents salary and 13% is other remuneration. Century City International Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

Century City International Holdings Limited's Growth

Over the last three years, Century City International Holdings Limited has shrunk its earnings per share by 18% per year. In the last year, its revenue is down 30%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. 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 Century City International Holdings Limited Been A Good Investment?

The return of -53% over three years would not have pleased Century City International Holdings Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Century City International Holdings (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the 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.