Key Insights

• Rykadan Capital's Annual General Meeting to take place on 16th of September
• CEO William Chan's total compensation includes salary of HK$10.5m
• The overall pay is 543% above the industry average
• Rykadan Capital's EPS declined by 76% over the past three years while total shareholder loss over the past three years was 86%

Shareholders of Rykadan Capital Limited (HKG:2288) will have been dismayed by the negative share price return over the last three years. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 16th of September, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

How Does Total Compensation For William Chan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Rykadan Capital Limited has a market capitalization of HK$38m, and reported total annual CEO compensation of HK$13m for the year to March 2024. We note that's an increase of 8.7% above last year. In particular, the salary of HK$10.5m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Real Estate industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.0m. Hence, we can conclude that William Chan is remunerated higher than the industry median. Moreover, William Chan also holds HK$13m worth of Rykadan Capital 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 76% of total compensation represents salary and 24% is other remuneration. Although there is a difference in how total compensation is set, Rykadan Capital more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Rykadan Capital Limited's Growth Numbers

Over the last three years, Rykadan Capital Limited has shrunk its earnings per share by 76% per year. Its revenue is up 19% over the last year.

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. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Rykadan Capital Limited Been A Good Investment?

The return of -86% over three years would not have pleased Rykadan Capital Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Rykadan Capital that investors should think about before committing capital to this stock.

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.