KWG Group Holdings Limited's (HKG:1813) CEO Will Probably Have Their Compensation Approved By Shareholders

It would be hard to discount the role that CEO Jiantao Kong has played in delivering the impressive results at KWG Group Holdings Limited (HKG:1813) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 03 June 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for KWG Group Holdings

How Does Total Compensation For Jiantao Kong Compare With Other Companies In The Industry?

At the time of writing, our data shows that KWG Group Holdings Limited has a market capitalization of HK$38b, and reported total annual CEO compensation of CN¥4.8m for the year to December 2020. We note that's a small decrease of 3.4% on last year. We note that the salary portion, which stands at CN¥3.50m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between HK$31b and HK$93b, we discovered that the median CEO total compensation of that group was CN¥5.1m. So it looks like KWG Group Holdings compensates Jiantao Kong in line with the median for the industry. Moreover, Jiantao Kong also holds HK$25m worth of KWG Group Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	CN¥3.5m	CN¥3.6m	73%
Other	CN¥1.3m	CN¥1.4m	27%
Total Compensation	CN¥4.8m	CN¥5.0m	100%

On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. Although there is a difference in how total compensation is set, KWG Group Holdings more or less reflects the market in terms of setting the salary. 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 KWG Group Holdings Limited's Growth Numbers

KWG Group Holdings Limited has seen its earnings per share (EPS) increase by 20% a year over the past three years. Its revenue is up 24% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has KWG Group Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with KWG Group Holdings Limited for providing a total return of 41% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in KWG Group Holdings we think you should know about.

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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