We Think Paliburg Holdings Limited's (HKG:617) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Paliburg Holdings will host its Annual General Meeting on 13th of June
• CEO Yuk Sui Lo's total compensation includes salary of HK$14.1m
• The total compensation is 658% higher than the average for the industry
• Paliburg Holdings' three-year loss to shareholders was 64% while its EPS was down 14% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Paliburg Holdings Limited (HKG:617) recently. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Paliburg Holdings

Comparing Paliburg Holdings Limited's CEO Compensation With The Industry

According to our data, Paliburg Holdings Limited has a market capitalization of HK$847m, and paid its CEO total annual compensation worth HK$16m over the year to December 2023. This means that the compensation hasn't changed much from last year. Notably, the salary which is HK$14.1m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Hospitality industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.1m. Hence, we can conclude that Yuk Sui Lo is remunerated higher than the industry median. What's more, Yuk Sui Lo holds HK$92m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	HK$14m	HK$14m	88%
Other	HK$2.0m	HK$2.8m	12%
Total Compensation	HK$16m	HK$17m	100%

On an industry level, around 87% of total compensation represents salary and 13% is other remuneration. Paliburg 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.

Paliburg Holdings Limited's Growth

Over the last three years, Paliburg Holdings Limited has shrunk its earnings per share by 14% per year. Its revenue is down 30% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Paliburg Holdings Limited Been A Good Investment?

The return of -64% over three years would not have pleased Paliburg Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

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.

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. We've identified 1 warning sign for Paliburg Holdings that investors should be aware of in a dynamic business environment.

Important note: Paliburg 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.

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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.