Shareholders May Be Wary Of Increasing Century City International Holdings Limited's (HKG:355) CEO Compensation Package

Century City International Holdings Limited (HKG:355) has not performed well recently and CEO Yuk Sui Lo will probably need to up their game. At the upcoming AGM on 08 June 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. 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

How Does Total Compensation For Yuk Sui Lo Compare With Other Companies In The Industry?

At the time of writing, our data shows that Century City International Holdings Limited has a market capitalization of HK$1.4b, and reported total annual CEO compensation of HK$15m for the year to December 2020. That's a notable decrease of 14% on last year. Notably, the salary which is HK$13.4m, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between HK$776m and HK$3.1b had a median total CEO compensation of HK$2.3m. Hence, we can conclude that Yuk Sui Lo is remunerated higher than the industry median. What's more, Yuk Sui Lo holds HK$818m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	HK$13m	HK$15m	86%
Other	HK$2.1m	HK$3.5m	14%
Total Compensation	HK$15m	HK$18m	100%

Talking in terms of the industry, salary represented approximately 87% of total compensation out of all the companies we analyzed, while other remuneration made up 13% of the pie. Our data reveals that Century City International Holdings allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Century City International Holdings Limited's Growth

Over the last three years, Century City International Holdings Limited has shrunk its earnings per share by 116% per year. It saw its revenue drop 50% over the last year.

Overall this is not a very positive result for shareholders. 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. 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 Century City International Holdings Limited Been A Good Investment?

The return of -40% over three years would not have pleased Century City International Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Century City International Holdings that investors should look into moving forward.

Important note: Century City International Holdings 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.

If you’re looking to trade a wide range of investments, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.