Key Insights

• Gemini Investments (Holdings)'s Annual General Meeting to take place on 30th of May
• CEO Alex Lai's total compensation includes salary of HK$1.93m
• Total compensation is similar to the industry average
• Over the past three years, Gemini Investments (Holdings)'s EPS fell by 65% and over the past three years, the total loss to shareholders 75%

The results at Gemini Investments (Holdings) Limited (HKG:174) have been quite disappointing recently and CEO Alex Lai bears some responsibility for this. At the upcoming AGM on 30th of May, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Comparing Gemini Investments (Holdings) Limited's CEO Compensation With The Industry

Our data indicates that Gemini Investments (Holdings) Limited has a market capitalization of HK$144m, and total annual CEO compensation was reported as HK$2.3m for the year to December 2023. That's a notable increase of 11% on last year. We note that the salary portion, which stands at HK$1.93m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Capital Markets industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.1m. From this we gather that Alex Lai is paid around the median for CEOs in the industry.

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. Although there is a difference in how total compensation is set, Gemini Investments (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 Gemini Investments (Holdings) Limited's Growth Numbers

Over the last three years, Gemini Investments (Holdings) Limited has shrunk its earnings per share by 65% per year. In the last year, its revenue changed by just 0.3%.

Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Gemini Investments (Holdings) Limited Been A Good Investment?

With a total shareholder return of -75% over three years, Gemini Investments (Holdings) Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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 2 warning signs for Gemini Investments (Holdings) (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 Gemini Investments (Holdings), 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.