Key Insights

• KNT Holdings' Annual General Meeting to take place on 26th of August
• Total pay for CEO Sik Chong includes HK$782.0k salary
• The overall pay is 58% below the industry average
• Over the past three years, KNT Holdings' EPS grew by 35% and over the past three years, the total loss to shareholders 78%

Shareholders may be wondering what CEO Sik Chong plans to do to improve the less than great performance at KNT Holdings Limited (HKG:1025) recently. At the next AGM coming up on 26th of August, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

Comparing KNT Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that KNT Holdings Limited has a market capitalization of HK$43m, and reported total annual CEO compensation of HK$800k for the year to March 2024. We note that's a decrease of 66% compared to last year. In particular, the salary of HK$782.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Luxury industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. Accordingly, KNT Holdings pays its CEO under the industry median. Furthermore, Sik Chong directly owns HK$12m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 91% of total compensation represents salary and 9% is other remuneration. Investors will find it interesting that KNT Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

KNT Holdings Limited's Growth

KNT Holdings Limited has seen its earnings per share (EPS) increase by 35% a year over the past three years. Its revenue is down 24% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 KNT Holdings Limited Been A Good Investment?

With a total shareholder return of -78% over three years, KNT Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Sik receives almost all of their compensation through a salary. The fact that shareholders have earned a negative share price return is certainly disconcerting. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key focus for the board and management will be how to align the share price with fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board's judgement and decision-making is aligned with their expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for KNT Holdings that you should be aware of before investing.

Switching gears from KNT 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.