Key Insights

• Deson Development International Holdings' Annual General Meeting to take place on 27th of August
• Total pay for CEO Boen Sien Tjia includes HK$4.20m salary
• The total compensation is 117% higher than the average for the industry
• Deson Development International Holdings' EPS declined by 9.8% over the past three years while total shareholder loss over the past three years was 54%

The underwhelming share price performance of Deson Development International Holdings Limited (HKG:262) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. The AGM coming up on 27th 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 our take on why we think shareholders might be hesitant about approving a raise at the moment.

Comparing Deson Development International Holdings Limited's CEO Compensation With The Industry

According to our data, Deson Development International Holdings Limited has a market capitalization of HK$75m, and paid its CEO total annual compensation worth HK$4.4m over the year to March 2024. That's just a smallish increase of 4.2% on last year. Notably, the salary which is HK$4.20m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Real Estate industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.0m. This suggests that Boen Sien Tjia is paid more than the median for the industry. Moreover, Boen Sien Tjia also holds HK$33m worth of Deson Development International Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. Deson Development International Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Deson Development International Holdings Limited's Growth

Over the last three years, Deson Development International Holdings Limited has shrunk its earnings per share by 9.8% per year. In the last year, its revenue is up 31%.

The decrease in EPS could be a concern for some investors. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Deson Development International Holdings Limited Been A Good Investment?

The return of -54% over three years would not have pleased Deson Development International Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Deson Development 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. 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 CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Deson Development International Holdings that investors should look into moving forward.

Switching gears from Deson Development International 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.