Key Insights

• Man King Holdings' Annual General Meeting to take place on 28th of August
• CEO Yuen Cheong Lo's total compensation includes salary of HK$4.17m
• Total compensation is 100% above industry average
• Man King Holdings' three-year loss to shareholders was 22% while its EPS was down 33% over the past three years

Man King Holdings Limited (HKG:2193) has not performed well recently and CEO Yuen Cheong Lo will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 28th of August. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Comparing Man King Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Man King Holdings Limited has a market capitalization of HK$75m, and reported total annual CEO compensation of HK$4.6m for the year to March 2024. That's a slight decrease of 3.6% on the prior year. In particular, the salary of HK$4.17m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.3m. Accordingly, our analysis reveals that Man King Holdings Limited pays Yuen Cheong Lo north of the industry median. Moreover, Yuen Cheong Lo also holds HK$844k worth of Man King Holdings stock directly under their own name.

Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. There isn't a significant difference between Man King Holdings and the broader market, in terms of salary allocation in the overall compensation package. 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.

Man King Holdings Limited's Growth

Over the last three years, Man King Holdings Limited has shrunk its earnings per share by 33% per year. In the last year, its revenue is down 25%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. 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 Man King Holdings Limited Been A Good Investment?

With a three year total loss of 22% for the shareholders, Man King Holdings Limited would certainly have some dissatisfied shareholders. 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.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Man King Holdings that you should be aware of before investing.

Important note: Man King Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.