Key Insights

• K W Nelson Interior Design and Contracting Group to hold its Annual General Meeting on 7th of June
• Total pay for CEO Nelson Lau includes HK$1.80m salary
• The total compensation is 239% higher than the average for the industry
• K W Nelson Interior Design and Contracting Group's EPS declined by 88% over the past three years while total shareholder loss over the past three years was 71%

K W Nelson Interior Design and Contracting Group Limited (HKG:8411) has not performed well recently and CEO Nelson Lau will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 7th of June. 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 K W Nelson Interior Design and Contracting Group Limited's CEO Compensation With The Industry

Our data indicates that K W Nelson Interior Design and Contracting Group Limited has a market capitalization of HK$36m, and total annual CEO compensation was reported as HK$6.0m for the year to December 2023. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$1.8m.

For comparison, other companies in the Hong Kong Consumer Services industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.8m. Hence, we can conclude that Nelson Lau is remunerated higher than the industry median. Furthermore, Nelson Lau directly owns HK$29m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. In K W Nelson Interior Design and Contracting Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at K W Nelson Interior Design and Contracting Group Limited's Growth Numbers

K W Nelson Interior Design and Contracting Group Limited has reduced its earnings per share by 88% a year over the last three years. Its revenue is down 32% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has K W Nelson Interior Design and Contracting Group Limited Been A Good Investment?

The return of -71% over three years would not have pleased K W Nelson Interior Design and Contracting Group Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for K W Nelson Interior Design and Contracting Group you should be aware of, and 2 of them are potentially serious.

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.