Shareholders Will Likely Find CL Group (Holdings) Limited's (HKG:8098) CEO Compensation Acceptable

Key Insights

• CL Group (Holdings)'s Annual General Meeting to take place on 6th of August
• Total pay for CEO Kin Chung Kwok includes HK$1.09m salary
• The total compensation is 45% less than the average for the industry
• CL Group (Holdings)'s EPS declined by 95% over the past three years while total shareholder loss over the past three years was 31%

Performance at CL Group (Holdings) Limited (HKG:8098) has been rather uninspiring recently and shareholders may be wondering how CEO Kin Chung Kwok plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 6th of August. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.

View our latest analysis for CL Group (Holdings)

How Does Total Compensation For Kin Chung Kwok Compare With Other Companies In The Industry?

At the time of writing, our data shows that CL Group (Holdings) Limited has a market capitalization of HK$114m, and reported total annual CEO compensation of HK$1.1m for the year to March 2024. That's slightly lower by 3.7% over the previous year. In particular, the salary of HK$1.09m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Capital Markets industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.0m. Accordingly, CL Group (Holdings) pays its CEO under the industry median.

Component	2024	2023	Proportion (2024)
Salary	HK$1.1m	HK$1.1m	98%
Other	HK$18k	HK$18k	2%
Total Compensation	HK$1.1m	HK$1.2m	100%

On an industry level, around 84% of total compensation represents salary and 16% is other remuneration. CL Group (Holdings) has gone down a largely traditional route, paying Kin Chung Kwok a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at CL Group (Holdings) Limited's Growth Numbers

Over the last three years, CL Group (Holdings) Limited has shrunk its earnings per share by 95% per year. In the last year, its revenue is up 36%.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 CL Group (Holdings) Limited Been A Good Investment?

Few CL Group (Holdings) Limited shareholders would feel satisfied with the return of -31% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Kin Chung receives almost all of their compensation through a salary. The loss to shareholders over the past three years is certainly concerning. The downward trend in share price performance may be attributable to the the fact that earnings growth has gone backwards. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for CL Group (Holdings) (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Switching gears from CL Group (Holdings), if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.

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