How Much Does Linekong Interactive Group's (HKG:8267) CEO Make?

This article will reflect on the compensation paid to Mingxiang Liao who has served as CEO of Linekong Interactive Group Co., Ltd. (HKG:8267) since 2018. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Linekong Interactive Group

Comparing Linekong Interactive Group Co., Ltd.'s CEO Compensation With the industry

According to our data, Linekong Interactive Group Co., Ltd. has a market capitalization of HK$183m, and paid its CEO total annual compensation worth CN¥2.9m over the year to December 2019. We note that's an increase of 47% above last year. Notably, the salary which is CN¥1.76m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.3m. This suggests that Mingxiang Liao is paid more than the median for the industry. What's more, Mingxiang Liao holds HK$6.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. In Linekong Interactive Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Linekong Interactive Group Co., Ltd.'s Growth

Linekong Interactive Group Co., Ltd.'s earnings per share (EPS) grew 39% per year over the last three years. It saw its revenue drop 16% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Linekong Interactive Group Co., Ltd. Been A Good Investment?

Given the total shareholder loss of 70% over three years, many shareholders in Linekong Interactive Group Co., Ltd. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Linekong Interactive Group Co., Ltd. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company has impressed with its EPS growth, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

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 Linekong Interactive Group (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Linekong Interactive Group 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. 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.
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