Shareholders May Be More Conservative With KWG Group Holdings Limited's (HKG:1813) CEO Compensation For Now

Key Insights

• KWG Group Holdings' Annual General Meeting to take place on 5th of June
• Total pay for CEO Jiantao Kong includes CN¥2.80m salary
• The total compensation is 34% higher than the average for the industry
• Over the past three years, KWG Group Holdings' EPS fell by 118% and over the past three years, the total loss to shareholders 96%

In the past three years, the share price of KWG Group Holdings Limited (HKG:1813) has struggled to grow and now shareholders are sitting on a loss. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 5th of June, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

Check out our latest analysis for KWG Group Holdings

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

Our data indicates that KWG Group Holdings Limited has a market capitalization of HK$1.5b, and total annual CEO compensation was reported as CN¥4.2m 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 CN¥2.80m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the Hong Kong Real Estate industry with market capitalizations between HK$781m and HK$3.1b, we discovered that the median CEO total compensation of that group was CN¥3.2m. Accordingly, our analysis reveals that KWG Group Holdings Limited pays Jiantao Kong north of the industry median. What's more, Jiantao Kong holds HK$899k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	CN¥2.8m	CN¥2.8m	66%
Other	CN¥1.4m	CN¥1.4m	34%
Total Compensation	CN¥4.2m	CN¥4.2m	100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. In KWG Group Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison 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 KWG Group Holdings Limited's Growth Numbers

Over the last three years, KWG Group Holdings Limited has shrunk its earnings per share by 118% per year. Its revenue is up 18% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has KWG Group Holdings Limited Been A Good Investment?

The return of -96% over three years would not have pleased KWG Group Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for KWG Group Holdings that investors should be aware of in a dynamic business environment.

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.