We Discuss Why EEKA Fashion Holdings Limited's (HKG:3709) CEO May Deserve A Higher Pay Packet

Key Insights

• EEKA Fashion Holdings will host its Annual General Meeting on 7th of June
• Total pay for CEO Ming Jin includes CN¥3.03m salary
• The overall pay is 42% below the industry average
• Over the past three years, EEKA Fashion Holdings' EPS grew by 22% and over the past three years, the total shareholder return was 18%

Shareholders will probably not be disappointed by the robust results at EEKA Fashion Holdings Limited (HKG:3709) recently and they will be keeping this in mind as they go into the AGM on 7th of June. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

See our latest analysis for EEKA Fashion Holdings

Comparing EEKA Fashion Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that EEKA Fashion Holdings Limited has a market capitalization of HK$7.8b, and reported total annual CEO compensation of CN¥3.0m for the year to December 2023. That's just a smallish increase of 7.1% on last year. Notably, the salary which is CN¥3.03m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Specialty Retail industry with market capitalizations ranging from HK$3.1b to HK$13b, the reported median CEO total compensation was CN¥5.3m. This suggests that Ming Jin is paid below the industry median. What's more, Ming Jin holds HK$2.8b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	CN¥3.0m	CN¥2.8m	99%
Other	CN¥16k	CN¥16k	1%
Total Compensation	CN¥3.0m	CN¥2.8m	100%

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. EEKA Fashion Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to 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 EEKA Fashion Holdings Limited's Growth Numbers

Over the past three years, EEKA Fashion Holdings Limited has seen its earnings per share (EPS) grow by 22% per year. It achieved revenue growth of 22% 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 EEKA Fashion Holdings Limited Been A Good Investment?

EEKA Fashion Holdings Limited has served shareholders reasonably well, with a total return of 18% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Ming receives almost all of their compensation through a salary. The company's overall performance, while not bad, could be better. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for EEKA Fashion Holdings that investors should be aware of in a dynamic business environment.

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.