Key Insights

• Lotus Horizon Holdings to hold its Annual General Meeting on 16th of August
• Salary of HK$1.94m is part of CEO Kwok Fun Chu's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Lotus Horizon Holdings' EPS fell by 47% and over the past three years, the total shareholder return was 109%

Performance at Lotus Horizon Holdings Limited (HKG:6063) has been reasonably good and CEO Kwok Fun Chu has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 16th of August, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

How Does Total Compensation For Kwok Fun Chu Compare With Other Companies In The Industry?

Our data indicates that Lotus Horizon Holdings Limited has a market capitalization of HK$430m, and total annual CEO compensation was reported as HK$2.8m for the year to March 2024. This was the same amount the CEO received in the prior year. In particular, the salary of HK$1.94m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.3m. This suggests that Lotus Horizon Holdings remunerates its CEO largely in line with the industry average. Moreover, Kwok Fun Chu also holds HK$323m worth of Lotus Horizon Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 84% of total compensation represents salary and 16% is other remuneration. In Lotus Horizon Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Lotus Horizon Holdings Limited's Growth Numbers

Over the last three years, Lotus Horizon Holdings Limited has shrunk its earnings per share by 47% per year. It achieved revenue growth of 27% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Lotus Horizon Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 109% over three years, Lotus Horizon Holdings Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Although the company has performed relatively well, we still think there are some areas that could be improved. Despite robust revenue growth, until EPS growth improves, shareholders may be hesitant to increase CEO pay by too much.

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 3 warning signs for Lotus Horizon Holdings you should be aware of, and 1 of them doesn't sit too well with us.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.