Key Insights

• Wong's Kong King International (Holdings) to hold its Annual General Meeting on 25th of June
• CEO Edward Tsui's total compensation includes salary of HK$6.03m
• The overall pay is 178% above the industry average
• Wong's Kong King International (Holdings)'s three-year loss to shareholders was 65% while its EPS was down 91% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Wong's Kong King International (Holdings) Limited (HKG:532) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 25th 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. We present the case why we think CEO compensation is out of sync with company performance.

How Does Total Compensation For Edward Tsui Compare With Other Companies In The Industry?

Our data indicates that Wong's Kong King International (Holdings) Limited has a market capitalization of HK$336m, and total annual CEO compensation was reported as HK$6.6m for the year to December 2023. Notably, that's a decrease of 12% over the year before. We note that the salary portion, which stands at HK$6.03m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Electronic industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.4m. Hence, we can conclude that Edward Tsui is remunerated higher than the industry median. Furthermore, Edward Tsui directly owns HK$3.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. Wong's Kong King International (Holdings) pays out 91% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Wong's Kong King International (Holdings) Limited's Growth Numbers

Over the last three years, Wong's Kong King International (Holdings) Limited has shrunk its earnings per share by 91% per year. In the last year, its revenue is down 21%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Wong's Kong King International (Holdings) Limited Been A Good Investment?

Few Wong's Kong King International (Holdings) Limited shareholders would feel satisfied with the return of -65% over three years. 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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Wong's Kong King International (Holdings) (1 is concerning!) that you should be aware of before investing here.

Important note: Wong's Kong King International (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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com