Shareholders Will Probably Hold Off On Increasing Zengame Technology Holding Limited's (HKG:2660) CEO Compensation For The Time Being

Key Insights

• Zengame Technology Holding will host its Annual General Meeting on 31st of May
• CEO Sheng Ye's total compensation includes salary of CN¥23.1m
• Total compensation is 678% above industry average
• Zengame Technology Holding's total shareholder return over the past three years was 213% while its EPS grew by 49% over the past three years

Performance at Zengame Technology Holding Limited (HKG:2660) has been reasonably good and CEO Sheng Ye 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 31st of May. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Zengame Technology Holding

Comparing Zengame Technology Holding Limited's CEO Compensation With The Industry

Our data indicates that Zengame Technology Holding Limited has a market capitalization of HK$3.6b, and total annual CEO compensation was reported as CN¥26m for the year to December 2023. We note that's an increase of 9.1% above last year. We note that the salary portion, which stands at CN¥23.1m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the Hong Kong Entertainment industry with market caps ranging from HK$1.6b to HK$6.3b, we found that the median CEO total compensation was CN¥3.3m. Hence, we can conclude that Sheng Ye is remunerated higher than the industry median. Furthermore, Sheng Ye directly owns HK$832m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥23m	CN¥21m	90%
Other	CN¥2.7m	CN¥2.3m	10%
Total Compensation	CN¥26m	CN¥24m	100%

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. There isn't a significant difference between Zengame Technology Holding and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Zengame Technology Holding Limited's Growth

Over the past three years, Zengame Technology Holding Limited has seen its earnings per share (EPS) grow by 49% per year. Its revenue is up 17% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Zengame Technology Holding Limited Been A Good Investment?

We think that the total shareholder return of 213%, over three years, would leave most Zengame Technology Holding Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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 Zengame Technology Holding that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.