We Discuss Why Gemini Investments (Holdings) Limited's (HKG:174) CEO Compensation May Be Closely Reviewed

Key Insights

• Gemini Investments (Holdings) will host its Annual General Meeting on 29th of May
• Total pay for CEO Alex Lai includes HK$2.00m salary
• The overall pay is comparable to the industry average
• Gemini Investments (Holdings)'s EPS declined by 23% over the past three years while total shareholder loss over the past three years was 68%

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Shareholders will probably not be too impressed with the underwhelming results at Gemini Investments (Holdings) Limited (HKG:174) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 29th of May. 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. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Gemini Investments (Holdings)

Comparing Gemini Investments (Holdings) Limited's CEO Compensation With The Industry

According to our data, Gemini Investments (Holdings) Limited has a market capitalization of HK$127m, and paid its CEO total annual compensation worth HK$2.4m over the year to December 2024. That's a modest increase of 4.8% on the prior year. In particular, the salary of HK$2.00m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Capital Markets industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.0m. This suggests that Gemini Investments (Holdings) remunerates its CEO largely in line with the industry average.

Speaking on an industry level, nearly 87% of total compensation represents salary, while the remainder of 13% is other remuneration. There isn't a significant difference between Gemini Investments (Holdings) and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Gemini Investments (Holdings) Limited's Growth Numbers

Over the last three years, Gemini Investments (Holdings) Limited has shrunk its earnings per share by 23% per year. Its revenue is down 1.3% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last 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 Gemini Investments (Holdings) Limited Been A Good Investment?

With a total shareholder return of -68% over three years, Gemini Investments (Holdings) Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for Gemini Investments (Holdings) (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Gemini Investments (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.

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

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.