Shareholders May Not Be So Generous With Deson Development International Holdings Limited's (HKG:262) CEO Compensation And Here's Why

Key Insights

• Deson Development International Holdings' Annual General Meeting to take place on 27th of August
• CEO Boen Sien Tjia's total compensation includes salary of HK$4.20m
• The overall pay is 117% above the industry average
• Over the past three years, Deson Development International Holdings' EPS fell by 9.8% and over the past three years, the total loss to shareholders 54%

In the past three years, the share price of Deson Development International Holdings Limited (HKG:262) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 27th of August, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

Check out our latest analysis for Deson Development International Holdings

How Does Total Compensation For Boen Sien Tjia Compare With Other Companies In The Industry?

According to our data, Deson Development International Holdings Limited has a market capitalization of HK$75m, and paid its CEO total annual compensation worth HK$4.4m over the year to March 2024. That's a fairly small increase of 4.2% over the previous year. Notably, the salary which is HK$4.20m, represents most of the total compensation being paid.

On comparing similar-sized companies in the Hong Kong Real Estate industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.0m. This suggests that Boen Sien Tjia is paid more than the median for the industry. Furthermore, Boen Sien Tjia directly owns HK$33m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	HK$4.2m	HK$4.2m	96%
Other	HK$175k	-	4%
Total Compensation	HK$4.4m	HK$4.2m	100%

On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. Deson Development International Holdings has gone down a largely traditional route, paying Boen Sien Tjia a high salary, giving it preference over non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Deson Development International Holdings Limited's Growth Numbers

Deson Development International Holdings Limited has reduced its earnings per share by 9.8% a year over the last three years. In the last year, its revenue is up 31%.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Deson Development International Holdings Limited Been A Good Investment?

Few Deson Development International Holdings Limited shareholders would feel satisfied with the return of -54% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Boen Sien receives almost all of their compensation through a salary. 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. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Deson Development International Holdings that investors should look into moving forward.

Important note: Deson Development International 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.