It May Be Possible That Kingkey Financial International (Holdings) Limited's (HKG:1468) CEO Compensation Could Get Bumped Up

Shareholders will probably not be disappointed by the robust results at Kingkey Financial International (Holdings) Limited (HKG:1468) recently and they will be keeping this in mind as they go into the AGM on 26 August 2021. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

See our latest analysis for Kingkey Financial International (Holdings)

Comparing Kingkey Financial International (Holdings) Limited's CEO Compensation With the industry

At the time of writing, our data shows that Kingkey Financial International (Holdings) Limited has a market capitalization of HK$4.8b, and reported total annual CEO compensation of HK$603k for the year to March 2021. This was the same as last year. In particular, the salary of HK$540.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from HK$3.1b to HK$12b, the reported median CEO total compensation was HK$3.7m. Accordingly, Kingkey Financial International (Holdings) pays its CEO under the industry median. Furthermore, Yin Ning Kwok directly owns HK$11m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	HK$540k	HK$540k	90%
Other	HK$63k	HK$63k	10%
Total Compensation	HK$603k	HK$603k	100%

On an industry level, roughly 94% of total compensation represents salary and 6% is other remuneration. Although there is a difference in how total compensation is set, Kingkey Financial International (Holdings) more or less reflects the market in terms of setting the salary. 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 Kingkey Financial International (Holdings) Limited's Growth Numbers

Kingkey Financial International (Holdings) Limited has reduced its earnings per share by 4.8% a year over the last three years. It achieved revenue growth of 19% over the last year.

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. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Kingkey Financial International (Holdings) Limited Been A Good Investment?

Boasting a total shareholder return of 173% over three years, Kingkey Financial International (Holdings) Limited has done well by shareholders. 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.

To Conclude...

While the company seems to be headed in the right direction performance-wise, there's always room for improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. 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 2 warning signs (and 1 which is a bit concerning) in Kingkey Financial International (Holdings) we think you should know about.

Important note: Kingkey Financial 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.
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