Shareholders Will Probably Not Have Any Issues With Leading Holdings Group Limited's (HKG:6999) CEO Compensation

Key Insights

• Leading Holdings Group's Annual General Meeting to take place on 30th of May
• CEO Yuhui Liu's total compensation includes salary of CN¥418.0k
• The total compensation is 75% less than the average for the industry
• Leading Holdings Group's EPS declined by 97% over the past three years while total shareholder loss over the past three years was 97%

The performance at Leading Holdings Group Limited (HKG:6999) has been rather lacklustre of late and shareholders may be wondering what CEO Yuhui Liu is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 30th of May. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Leading Holdings Group

How Does Total Compensation For Yuhui Liu Compare With Other Companies In The Industry?

According to our data, Leading Holdings Group Limited has a market capitalization of HK$288m, and paid its CEO total annual compensation worth CN¥431k over the year to December 2023. Notably, that's a decrease of 16% over the year before. In particular, the salary of CN¥418.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Real Estate industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.7m. This suggests that Yuhui Liu is paid below the industry median. Moreover, Yuhui Liu also holds HK$76m worth of Leading Holdings Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	CN¥418k	CN¥445k	97%
Other	CN¥13k	CN¥69k	3%
Total Compensation	CN¥431k	CN¥514k	100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. Leading Holdings Group has gone down a largely traditional route, paying Yuhui Liu a high salary, giving it preference over non-salary benefits. 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 Leading Holdings Group Limited's Growth Numbers

Leading Holdings Group Limited has reduced its earnings per share by 97% a year over the last three years. Its revenue is up 32% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Leading Holdings Group Limited Been A Good Investment?

The return of -97% over three years would not have pleased Leading Holdings Group Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Leading Holdings Group pays its CEO a majority of compensation through a salary. The fact that shareholders are sitting on a loss is certainly disheartening. The fact that earnings growth has gone backwards could be a factor for the downward trend in the share price. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Leading Holdings Group (2 are concerning!) that you should be aware of before investing here.

Switching gears from Leading Holdings Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.