Here's Why Shareholders Should Examine Activation Group Holdings Limited's (HKG:9919) CEO Compensation Package More Closely

Key Insights

• Activation Group Holdings will host its Annual General Meeting on 15th of May
• CEO Steve Lau's total compensation includes salary of CN¥1.83m
• The total compensation is 36% higher than the average for the industry
• Activation Group Holdings' EPS declined by 5.2% over the past three years while total shareholder loss over the past three years was 5.1%

Our free stock report includes 2 warning signs investors should be aware of before investing in Activation Group Holdings. Read for free now.

Shareholders will probably not be too impressed with the underwhelming results at Activation Group Holdings Limited (HKG:9919) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 15th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Activation Group Holdings

Comparing Activation Group Holdings Limited's CEO Compensation With The Industry

Our data indicates that Activation Group Holdings Limited has a market capitalization of HK$626m, and total annual CEO compensation was reported as CN¥2.4m for the year to December 2024. We note that's a decrease of 19% compared to last year. Notably, the salary which is CN¥1.83m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Media industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.7m. Accordingly, our analysis reveals that Activation Group Holdings Limited pays Steve Lau north of the industry median. Furthermore, Steve Lau directly owns HK$133m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	CN¥1.8m	CN¥1.6m	77%
Other	CN¥536k	CN¥1.3m	23%
Total Compensation	CN¥2.4m	CN¥2.9m	100%

On an industry level, around 83% of total compensation represents salary and 17% is other remuneration. Activation Group Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Activation Group Holdings Limited's Growth

Activation Group Holdings Limited has reduced its earnings per share by 5.2% a year over the last three years. In the last year, its revenue is down 12%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Activation Group Holdings Limited Been A Good Investment?

With a three year total loss of 5.1% for the shareholders, Activation Group Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Activation Group Holdings that investors should look into moving forward.

Important note: Activation Group 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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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.