We Think Shareholders May Want To Consider A Review Of FingerTango Inc.'s (HKG:6860) CEO Compensation Package

Key Insights

• FingerTango to hold its Annual General Meeting on 21st of June
• Total pay for CEO Jie Liu includes CN¥1.60m salary
• The overall pay is 49% above the industry average
• FingerTango's EPS declined by 63% over the past three years while total shareholder loss over the past three years was 62%

The results at FingerTango Inc. (HKG:6860) have been quite disappointing recently and CEO Jie Liu bears some responsibility for this. At the upcoming AGM on 21st of June, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for FingerTango

Comparing FingerTango Inc.'s CEO Compensation With The Industry

According to our data, FingerTango Inc. has a market capitalization of HK$157m, and paid its CEO total annual compensation worth CN¥1.8m over the year to December 2023. That's a notable decrease of 26% on last year. Notably, the salary which is CN¥1.60m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Entertainment industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.2m. This suggests that Jie Liu is paid more than the median for the industry. Furthermore, Jie Liu directly owns HK$83m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.6m	CN¥2.2m	87%
Other	CN¥235k	CN¥291k	13%
Total Compensation	CN¥1.8m	CN¥2.5m	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. Although there is a difference in how total compensation is set, FingerTango more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

FingerTango Inc.'s Growth

Over the last three years, FingerTango Inc. has shrunk its earnings per share by 63% per year. In the last year, its revenue is down 22%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has FingerTango Inc. Been A Good Investment?

Few FingerTango Inc. shareholders would feel satisfied with the return of -62% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in FingerTango we think you should know about.

Switching gears from FingerTango, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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