KangLi International Holdings Limited's (HKG:6890) CEO Will Probably Find It Hard To See A Huge Raise This Year

Key Insights

• KangLi International Holdings to hold its Annual General Meeting on 14th of June
• Total pay for CEO Zhihong Zhang includes CN¥587.0k salary
• The overall pay is comparable to the industry average
• Over the past three years, KangLi International Holdings' EPS grew by 2.3% and over the past three years, the total loss to shareholders 38%

The underwhelming share price performance of KangLi International Holdings Limited (HKG:6890) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 14th of June could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for KangLi International Holdings

Comparing KangLi International Holdings Limited's CEO Compensation With The Industry

Our data indicates that KangLi International Holdings Limited has a market capitalization of HK$227m, and total annual CEO compensation was reported as CN¥715k for the year to December 2023. That's a slight decrease of 4.9% on the prior year. In particular, the salary of CN¥587.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Metals and Mining industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥889k. This suggests that KangLi International Holdings remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	CN¥587k	CN¥636k	82%
Other	CN¥128k	CN¥116k	18%
Total Compensation	CN¥715k	CN¥752k	100%

Talking in terms of the industry, salary represented approximately 88% of total compensation out of all the companies we analyzed, while other remuneration made up 12% of the pie. Although there is a difference in how total compensation is set, KangLi International Holdings more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

KangLi International Holdings Limited's Growth

Over the past three years, KangLi International Holdings Limited has seen its earnings per share (EPS) grow by 2.3% per year. In the last year, its revenue is up 29%.

It's hard to interpret the strong revenue growth as anything other than a positive. And in that context, the modest EPS improvement certainly isn't shabby. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has KangLi International Holdings Limited Been A Good Investment?

The return of -38% over three years would not have pleased KangLi International Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. 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. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 2 which are a bit concerning) in KangLi International Holdings we think you should know about.

Switching gears from KangLi International 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.