Most Shareholders Will Probably Find That The Compensation For Veeko International Holdings Limited's (HKG:1173) CEO Is Reasonable

Key Insights

• Veeko International Holdings to hold its Annual General Meeting on 26th of September
• Salary of HK$660.0k is part of CEO Yuk Sum Lam's total remuneration
• The total compensation is 60% less than the average for the industry
• Veeko International Holdings' EPS grew by 93% over the past three years while total shareholder loss over the past three years was 20%

The performance at Veeko International Holdings Limited (HKG:1173) has been rather lacklustre of late and shareholders may be wondering what CEO Yuk Sum Lam 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 26th of September. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for Veeko International Holdings

How Does Total Compensation For Yuk Sum Lam Compare With Other Companies In The Industry?

At the time of writing, our data shows that Veeko International Holdings Limited has a market capitalization of HK$101m, and reported total annual CEO compensation of HK$691k for the year to March 2024. This was the same amount the CEO received in the prior year. Notably, the salary which is HK$660.0k, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Specialty Retail industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.7m. Accordingly, Veeko International Holdings pays its CEO under the industry median. Moreover, Yuk Sum Lam also holds HK$11m worth of Veeko International Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	HK$660k	HK$660k	96%
Other	HK$31k	HK$31k	4%
Total Compensation	HK$691k	HK$691k	100%

Talking in terms of the industry, salary represented approximately 90% of total compensation out of all the companies we analyzed, while other remuneration made up 10% of the pie. Veeko International Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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 Veeko International Holdings Limited's Growth Numbers

Veeko International Holdings Limited has seen its earnings per share (EPS) increase by 93% a year over the past three years. It achieved revenue growth of 24% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Veeko International Holdings Limited Been A Good Investment?

Given the total shareholder loss of 20% over three years, many shareholders in Veeko International Holdings Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Yuk Sum receives almost all of their compensation through a salary. The fact that shareholders are sitting on a loss is certainly disheartening. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key focus for the board and management will be how to align the share price with fundamentals. 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 2 warning signs for Veeko International Holdings (1 is potentially serious!) that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.