Here's Why Shareholders May Want To Be Cautious With Increasing Kuaishou Technology's (HKG:1024) CEO Pay Packet

Key Insights

• Kuaishou Technology will host its Annual General Meeting on 19th of June
• Salary of CN¥4.85m is part of CEO Yixiao Cheng's total remuneration
• Total compensation is 77% above industry average
• Kuaishou Technology's three-year loss to shareholders was 27% while its EPS grew by 129% over the past three years

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The underwhelming share price performance of Kuaishou Technology (HKG:1024) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 19th of June could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. 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 Kuaishou Technology

How Does Total Compensation For Yixiao Cheng Compare With Other Companies In The Industry?

According to our data, Kuaishou Technology has a market capitalization of HK$251b, and paid its CEO total annual compensation worth CN¥80m over the year to December 2024. That's a notable decrease of 35% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥4.9m.

In comparison with other companies in the Hong Kong Interactive Media and Services industry with market capitalizations over HK$63b, the reported median total CEO compensation was CN¥45m. Accordingly, our analysis reveals that Kuaishou Technology pays Yixiao Cheng north of the industry median. What's more, Yixiao Cheng holds HK$22b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 32% of total compensation represents salary and 68% is other remuneration. In Kuaishou Technology's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Kuaishou Technology's Growth

Kuaishou Technology's earnings per share (EPS) grew 129% per year over the last three years. It achieved revenue growth of 11% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Kuaishou Technology Been A Good Investment?

Given the total shareholder loss of 27% over three years, many shareholders in Kuaishou Technology are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. 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.

Whatever your view on compensation, you might want to check if insiders are buying or selling Kuaishou Technology shares (free trial).

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.