Key Insights

• LFG Investment Holdings' Annual General Meeting to take place on 13th of August
• Total pay for CEO Gary Mui includes HK$720.0k salary
• The total compensation is 454% higher than the average for the industry
• LFG Investment Holdings' three-year loss to shareholders was 26% while its EPS was down 63% over the past three years

The underwhelming share price performance of LFG Investment Holdings Limited (HKG:3938) in the past three years would have disappointed many shareholders. Per share earnings growth is also poor, despite revenues growing. The AGM coming up on 13th of August will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

Comparing LFG Investment Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that LFG Investment Holdings Limited has a market capitalization of HK$76m, and reported total annual CEO compensation of HK$11m for the year to March 2024. That's a notable increase of 32% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$720k.

For comparison, other companies in the Hong Kong Capital Markets industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. Hence, we can conclude that Gary Mui is remunerated higher than the industry median.

Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. In LFG Investment Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at LFG Investment Holdings Limited's Growth Numbers

LFG Investment Holdings Limited has reduced its earnings per share by 63% a year over the last three years. In the last year, its revenue is up 115%.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has LFG Investment Holdings Limited Been A Good Investment?

With a three year total loss of 26% for the shareholders, LFG Investment Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for LFG Investment Holdings that you should be aware of before investing.

Switching gears from LFG Investment Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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