It's Probably Less Likely That Inkeverse Group Limited's (HKG:3700) CEO Will See A Huge Pay Rise This Year

Key Insights

• Inkeverse Group's Annual General Meeting to take place on 13th of June
• Total pay for CEO Yousheng Feng includes CN¥1.03m salary
• The total compensation is similar to the average for the industry
• Inkeverse Group's three-year loss to shareholders was 61% while its EPS grew by 26% over the past three years

The underwhelming share price performance of Inkeverse Group Limited (HKG:3700) 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. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 13th of June. 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.

View our latest analysis for Inkeverse Group

Comparing Inkeverse Group Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Inkeverse Group Limited has a market capitalization of HK$1.6b, and reported total annual CEO compensation of CN¥3.4m for the year to December 2023. That's just a smallish increase of 5.2% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥1.0m.

On examining similar-sized companies in the Hong Kong Interactive Media and Services industry with market capitalizations between HK$781m and HK$3.1b, we discovered that the median CEO total compensation of that group was CN¥4.4m. So it looks like Inkeverse Group compensates Yousheng Feng in line with the median for the industry. Furthermore, Yousheng Feng directly owns HK$305m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.0m	CN¥1.1m	31%
Other	CN¥2.3m	CN¥2.1m	69%
Total Compensation	CN¥3.4m	CN¥3.2m	100%

Talking in terms of the industry, salary represented approximately 33% of total compensation out of all the companies we analyzed, while other remuneration made up 67% of the pie. There isn't a significant difference between Inkeverse Group and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Inkeverse Group Limited's Growth Numbers

Inkeverse Group Limited has seen its earnings per share (EPS) increase by 26% a year over the past three years. It achieved revenue growth of 8.3% 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 modest revenue growth, suggesting the underlying business is healthy. 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 Inkeverse Group Limited Been A Good Investment?

With a total shareholder return of -61% over three years, Inkeverse Group Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too 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. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Inkeverse Group (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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.