It's Unlikely That Shareholders Will Increase iDreamSky Technology Holdings Limited's (HKG:1119) Compensation By Much This Year

Key Insights

• iDreamSky Technology Holdings' Annual General Meeting to take place on 28th of June
• Total pay for CEO Michael Chen includes CN¥1.22m salary
• The total compensation is 61% less than the average for the industry
• Over the past three years, iDreamSky Technology Holdings' EPS fell by 49% and over the past three years, the total loss to shareholders 40%

The disappointing performance at iDreamSky Technology Holdings Limited (HKG:1119) will make some shareholders rather disheartened. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 28th of June. From our analysis below, we think CEO compensation looks appropriate for now.

View our latest analysis for iDreamSky Technology Holdings

Comparing iDreamSky Technology Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that iDreamSky Technology Holdings Limited has a market capitalization of HK$4.5b, and reported total annual CEO compensation of CN¥1.3m for the year to December 2023. We note that's an increase of 20% above last year. Notably, the salary which is CN¥1.22m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Entertainment industry with market capitalizations ranging from HK$1.6b to HK$6.2b, the reported median CEO total compensation was CN¥3.3m. Accordingly, iDreamSky Technology Holdings pays its CEO under the industry median. Furthermore, Michael Chen directly owns HK$768m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.2m	CN¥1.0m	95%
Other	CN¥63k	CN¥51k	5%
Total Compensation	CN¥1.3m	CN¥1.1m	100%

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. iDreamSky Technology Holdings has gone down a largely traditional route, paying Michael Chen a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

iDreamSky Technology Holdings Limited's Growth

iDreamSky Technology Holdings Limited has reduced its earnings per share by 49% a year over the last three years. It saw its revenue drop 26% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has iDreamSky Technology Holdings Limited Been A Good Investment?

Few iDreamSky Technology Holdings Limited shareholders would feel satisfied with the return of -40% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Michael receives almost all of their compensation through a salary. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for iDreamSky Technology Holdings that investors should look into moving forward.

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.

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