Key Insights

• Easyknit International Holdings to hold its Annual General Meeting on 22nd of August
• Total pay for CEO Candy Koon includes HK$2.60m salary
• Total compensation is similar to the industry average
• Over the past three years, Easyknit International Holdings' EPS fell by 84% and over the past three years, the total loss to shareholders 27%

In the past three years, the share price of Easyknit International Holdings Limited (HKG:1218) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. The AGM coming up on 22nd of August 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.

How Does Total Compensation For Candy Koon Compare With Other Companies In The Industry?

At the time of writing, our data shows that Easyknit International Holdings Limited has a market capitalization of HK$211m, and reported total annual CEO compensation of HK$2.6m for the year to March 2024. That's just a smallish increase of 7.7% on last year. Notably, the salary which is HK$2.60m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Real Estate industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.1m. This suggests that Easyknit International Holdings remunerates its CEO largely in line with the industry average.

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. Easyknit International Holdings has gone down a largely traditional route, paying Candy Koon a high salary, giving it preference over non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Easyknit International Holdings Limited's Growth Numbers

Over the last three years, Easyknit International Holdings Limited has shrunk its earnings per share by 84% per year. It achieved revenue growth of 162% 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. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Easyknit International Holdings Limited Been A Good Investment?

With a three year total loss of 27% for the shareholders, Easyknit International Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Easyknit International Holdings pays its CEO a majority of compensation through a salary. The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 2 which are concerning) in Easyknit International Holdings we think you should know about.

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.