We Think Shareholders May Want To Consider A Review Of K. Wah International Holdings Limited's (HKG:173) CEO Compensation Package

Key Insights

• K. Wah International Holdings will host its Annual General Meeting on 12th of June
• Salary of HK$15.4m is part of CEO Che-Woo Lui's total remuneration
• The total compensation is 358% higher than the average for the industry
• K. Wah International Holdings' three-year loss to shareholders was 41% while its EPS was down 37% over the past three years

K. Wah International Holdings Limited (HKG:173) has not performed well recently and CEO Che-Woo Lui will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 12th of June. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for K. Wah International Holdings

How Does Total Compensation For Che-Woo Lui Compare With Other Companies In The Industry?

Our data indicates that K. Wah International Holdings Limited has a market capitalization of HK$5.8b, and total annual CEO compensation was reported as HK$22m for 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$15.4m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Real Estate industry with market capitalizations ranging between HK$3.1b and HK$12b had a median total CEO compensation of HK$4.7m. This suggests that Che-Woo Lui is paid more than the median for the industry. Furthermore, Che-Woo Lui directly owns HK$3.0b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	HK$15m	HK$15m	71%
Other	HK$6.3m	HK$6.1m	29%
Total Compensation	HK$22m	HK$21m	100%

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. Although there is a difference in how total compensation is set, K. Wah International Holdings more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

K. Wah International Holdings Limited's Growth

Over the last three years, K. Wah International Holdings Limited has shrunk its earnings per share by 37% per year. Its revenue is down 31% over the previous year.

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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has K. Wah International Holdings Limited Been A Good Investment?

The return of -41% over three years would not have pleased K. Wah International Holdings Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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 can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for K. Wah International Holdings that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.