Here's Why Shareholders May Want To Be Cautious With Increasing Medicskin Holdings Limited's (HKG:8307) CEO Pay Packet

Performance at Medicskin Holdings Limited (HKG:8307) has been reasonably good and CEO Kwok Leung Kong has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 23 September 2022. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Medicskin Holdings

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

According to our data, Medicskin Holdings Limited has a market capitalization of HK$86m, and paid its CEO total annual compensation worth HK$6.0m over the year to March 2022. That's a notable increase of 26% on last year. We note that the salary portion, which stands at HK$4.57m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.3m. This suggests that Kwok Leung Kong is paid more than the median for the industry. Moreover, Kwok Leung Kong also holds HK$60m worth of Medicskin Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	HK$4.6m	HK$3.5m	77%
Other	HK$1.4m	HK$1.2m	23%
Total Compensation	HK$6.0m	HK$4.7m	100%

Speaking on an industry level, nearly 83% of total compensation represents salary, while the remainder of 17% is other remuneration. Our data reveals that Medicskin Holdings allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Medicskin Holdings Limited's Growth

Medicskin Holdings Limited's earnings per share (EPS) grew 114% per year over the last three years. In the last year, its revenue is up 2.2%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Medicskin Holdings Limited Been A Good Investment?

With a total shareholder return of 21% over three years, Medicskin Holdings Limited shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Medicskin Holdings (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Important note: Medicskin 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.