We Think Shareholders Are Less Likely To Approve A Pay Rise For Legend Holdings Corporation's (HKG:3396) CEO For Now

Key Insights

• Legend Holdings' Annual General Meeting to take place on 26th of June
• Salary of CN¥1.56m is part of CEO Peng Li's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Legend Holdings' EPS fell by 72% and over the past three years, the total loss to shareholders 13%

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In the past three years, shareholders of Legend Holdings Corporation (HKG:3396) have seen a loss on their investment. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. The AGM coming up on 26th of June will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

See our latest analysis for Legend Holdings

Comparing Legend Holdings Corporation's CEO Compensation With The Industry

According to our data, Legend Holdings Corporation has a market capitalization of HK$19b, and paid its CEO total annual compensation worth CN¥4.6m over the year to December 2024. That's a notable increase of 34% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥1.6m.

For comparison, other companies in the Hong Kong Tech industry with market capitalizations ranging between HK$16b and HK$50b had a median total CEO compensation of CN¥3.5m. From this we gather that Peng Li is paid around the median for CEOs in the industry. What's more, Peng Li holds HK$4.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 92% of total compensation represents salary and 8% is other remuneration. It's interesting to note that Legend Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Legend Holdings Corporation's Growth

Legend Holdings Corporation has reduced its earnings per share by 72% a year over the last three years. Its revenue is up 18% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Legend Holdings Corporation Been A Good Investment?

Since shareholders would have lost about 13% over three years, some Legend Holdings Corporation investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Legend Holdings that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.