Here's Why Gameone Holdings Limited's (HKG:8282) CEO Compensation Is The Least Of Shareholders Concerns

Shareholders may be wondering what CEO Kin Fai Lam plans to do to improve the less than great performance at Gameone Holdings Limited (HKG:8282) recently. At the next AGM coming up on 10 May 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Gameone Holdings

How Does Total Compensation For Kin Fai Lam Compare With Other Companies In The Industry?

Our data indicates that Gameone Holdings Limited has a market capitalization of HK$46m, and total annual CEO compensation was reported as HK$672k for the year to December 2020. That's just a smallish increase of 4.7% on last year. We note that the salary portion, which stands at HK$624.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.2m. This suggests that Kin Fai Lam is paid below the industry median.

Component	2020	2019	Proportion (2020)
Salary	HK$624k	HK$624k	93%
Other	HK$48k	HK$18k	7%
Total Compensation	HK$672k	HK$642k	100%

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. Although there is a difference in how total compensation is set, Gameone Holdings 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.

Gameone Holdings Limited's Growth

Gameone Holdings Limited has seen its earnings per share (EPS) increase by 35% a year over the past three years. In the last year, its revenue is down 36%.

Shareholders would be glad to know that the company has improved itself over the last few years. 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 Gameone Holdings Limited Been A Good Investment?

With a total shareholder return of -73% over three years, Gameone Holdings Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders have earned a negative share price return is certainly disconcerting. 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. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

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 identified 3 warning signs for Gameone Holdings (2 can't be ignored!) that you should be aware of before investing here.

Important note: Gameone Holdings 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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