We Think Shareholders Are Less Likely To Approve A Large Pay Rise For KLN Logistics Group Limited's (HKG:636) CEO For Now

Key Insights

• KLN Logistics Group's Annual General Meeting to take place on 26th of May
• CEO Vicky Cheung's total compensation includes salary of HK$6.60m
• The total compensation is 376% higher than the average for the industry
• Over the past three years, KLN Logistics Group's EPS fell by 25% and over the past three years, the total loss to shareholders 50%

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In the past three years, the share price of KLN Logistics Group Limited (HKG:636) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 26th of May, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

See our latest analysis for KLN Logistics Group

How Does Total Compensation For Vicky Cheung Compare With Other Companies In The Industry?

According to our data, KLN Logistics Group Limited has a market capitalization of HK$13b, and paid its CEO total annual compensation worth HK$15m over the year to December 2024. We note that's an increase of 91% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$6.6m.

For comparison, other companies in the Hong Kong Logistics industry with market capitalizations ranging between HK$7.8b and HK$25b had a median total CEO compensation of HK$3.1m. This suggests that Vicky Cheung is paid more than the median for the industry. What's more, Vicky Cheung holds HK$29m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	HK$6.6m	HK$5.6m	45%
Other	HK$8.2m	HK$2.2m	55%
Total Compensation	HK$15m	HK$7.8m	100%

Speaking on an industry level, nearly 88% of total compensation represents salary, while the remainder of 12% is other remuneration. KLN Logistics Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at KLN Logistics Group Limited's Growth Numbers

KLN Logistics Group Limited has reduced its earnings per share by 25% a year over the last three years. Its revenue is up 23% over the last year.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has KLN Logistics Group Limited Been A Good Investment?

Few KLN Logistics Group Limited shareholders would feel satisfied with the return of -50% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for KLN Logistics Group (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from KLN Logistics Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.