We Discuss Why Deson Development International Holdings Limited's (HKG:262) CEO Compensation May Be Closely Reviewed

Shareholders will probably not be too impressed with the underwhelming results at Deson Development International Holdings Limited (HKG:262) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 30 August 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Deson Development International Holdings

Comparing Deson Development International Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that Deson Development International Holdings Limited has a market capitalization of HK$111m, and reported total annual CEO compensation of HK$3.4m for the year to March 2021. There was no change in the compensation compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$3.4m.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. Accordingly, our analysis reveals that Deson Development International Holdings Limited pays Boen Sien Tjia north of the industry median. What's more, Boen Sien Tjia holds HK$50m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	HK$3.4m	HK$3.4m	100%
Other	-	-	-
Total Compensation	HK$3.4m	HK$3.4m	100%

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. On a company level, Deson Development International Holdings prefers to reward its CEO through a salary, opting not to pay Boen Sien Tjia through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

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

Deson Development International Holdings Limited has reduced its earnings per share by 107% a year over the last three years. It saw its revenue drop 70% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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?

The return of -50% over three years would not have pleased Deson Development International Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Deson Development International Holdings rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which can't be ignored) in Deson Development International 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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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.
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