Kelfred Holdings Limited's (HKG:1134) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Kelfred Holdings' Annual General Meeting to take place on 29th of May
• Salary of HK$3.00m is part of CEO Ken Kwok's total remuneration
• The total compensation is 111% higher than the average for the industry
• Kelfred Holdings' three-year loss to shareholders was 77% while its EPS grew by 80% over the past three years

The underwhelming share price performance of Kelfred Holdings Limited (HKG:1134) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 29th of May. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Kelfred Holdings

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

According to our data, Kelfred Holdings Limited has a market capitalization of HK$205m, and paid its CEO total annual compensation worth HK$3.5m over the year to December 2023. That's a notable decrease of 20% on last year. We note that the salary portion, which stands at HK$3.00m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Medical Equipment industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.7m. Accordingly, our analysis reveals that Kelfred Holdings Limited pays Ken Kwok north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	HK$3.0m	HK$2.8m	85%
Other	HK$518k	HK$1.6m	15%
Total Compensation	HK$3.5m	HK$4.4m	100%

Talking in terms of the industry, salary represented approximately 68% of total compensation out of all the companies we analyzed, while other remuneration made up 32% of the pie. It's interesting to note that Kelfred Holdings pays out a greater portion of remuneration through salary, compared to the industry. 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.

Kelfred Holdings Limited's Growth

Kelfred Holdings Limited has seen its earnings per share (EPS) increase by 80% a year over the past three years. It saw its revenue drop 16% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Kelfred Holdings Limited Been A Good Investment?

Few Kelfred Holdings Limited shareholders would feel satisfied with the return of -77% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Kelfred Holdings you should be aware of, and 1 of them is a bit concerning.

Switching gears from Kelfred 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.

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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.