We Discuss Why C C Land Holdings Limited's (HKG:1224) CEO Compensation May Be Closely Reviewed

Key Insights

• C C Land Holdings to hold its Annual General Meeting on 20th of May
• CEO Peter Lam's total compensation includes salary of HK$11.7m
• The overall pay is 501% above the industry average
• C C Land Holdings' EPS declined by 106% over the past three years while total shareholder loss over the past three years was 34%

The results at C C Land Holdings Limited (HKG:1224) have been quite disappointing recently and CEO Peter Lam bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 20th of May. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for C C Land Holdings

Comparing C C Land Holdings Limited's CEO Compensation With The Industry

According to our data, C C Land Holdings Limited has a market capitalization of HK$4.6b, and paid its CEO total annual compensation worth HK$19m over the year to December 2023. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at HK$11.7m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the Hong Kong Real Estate industry with market caps ranging from HK$1.6b to HK$6.3b, we found that the median CEO total compensation was HK$3.2m. This suggests that Peter Lam is paid more than the median for the industry. Moreover, Peter Lam also holds HK$579k worth of C C Land Holdings stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	HK$12m	HK$12m	60%
Other	HK$7.7m	HK$8.5m	40%
Total Compensation	HK$19m	HK$20m	100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. C C Land Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at C C Land Holdings Limited's Growth Numbers

C C Land Holdings Limited has reduced its earnings per share by 106% a year over the last three years. It saw its revenue drop 5.1% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has C C Land Holdings Limited Been A Good Investment?

With a total shareholder return of -34% over three years, C C Land Holdings Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for C C Land Holdings that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.