Most Shareholders Will Probably Agree With Silkwave Inc's (HKG:471) CEO Compensation

Key Insights

• Silkwave's Annual General Meeting to take place on 28th of June
• Total pay for CEO Charles Wong includes US$77.0k salary
• Total compensation is 68% below industry average
• Silkwave's three-year loss to shareholders was 68% while its EPS grew by 108% over the past three years

Shareholders may be wondering what CEO Charles Wong plans to do to improve the less than great performance at Silkwave Inc (HKG:471) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 28th of June. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Silkwave

Comparing Silkwave Inc's CEO Compensation With The Industry

At the time of writing, our data shows that Silkwave Inc has a market capitalization of HK$170m, and reported total annual CEO compensation of US$79k for the year to December 2023. This was the same as last year. In particular, the salary of US$77.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Media industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was US$248k. Accordingly, Silkwave pays its CEO under the industry median. What's more, Charles Wong holds HK$92m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$77k	US$77k	97%
Other	US$2.0k	US$2.0k	3%
Total Compensation	US$79k	US$79k	100%

Speaking on an industry level, nearly 86% of total compensation represents salary, while the remainder of 14% is other remuneration. Investors will find it interesting that Silkwave pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Silkwave Inc's Growth Numbers

Over the past three years, Silkwave Inc has seen its earnings per share (EPS) grow by 108% per year. It saw its revenue drop 14% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Silkwave Inc Been A Good Investment?

The return of -68% over three years would not have pleased Silkwave Inc shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Silkwave pays its CEO a majority of compensation through a salary. The fact that shareholders are sitting on a loss is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key focus for the board and management will be how to align the share price with fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 5 warning signs for Silkwave you should be aware of, and 2 of them are significant.

Important note: Silkwave is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.

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