Key Insights

• L.K. Technology Holdings to hold its Annual General Meeting on 6th of September
• CEO Zhuo Ming Liu's total compensation includes salary of HK$2.23m
• The total compensation is 44% less than the average for the industry
• L.K. Technology Holdings' EPS grew by 11% over the past three years while total shareholder loss over the past three years was 90%

The performance at L.K. Technology Holdings Limited (HKG:558) has been rather lacklustre of late and shareholders may be wondering what CEO Zhuo Ming Liu is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 6th of September. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

How Does Total Compensation For Zhuo Ming Liu Compare With Other Companies In The Industry?

At the time of writing, our data shows that L.K. Technology Holdings Limited has a market capitalization of HK$3.4b, and reported total annual CEO compensation of HK$2.2m for the year to March 2024. Notably, that's an increase of 58% over the year before. Notably, the salary which is HK$2.23m, represents most of the total compensation being paid.

On examining similar-sized companies in the Hong Kong Machinery industry with market capitalizations between HK$1.6b and HK$6.2b, we discovered that the median CEO total compensation of that group was HK$4.0m. This suggests that Zhuo Ming Liu is paid below the industry median.

On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. L.K. Technology Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

L.K. Technology Holdings Limited's Growth

L.K. Technology Holdings Limited has seen its earnings per share (EPS) increase by 11% a year over the past three years. Its revenue is down 1.0% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has L.K. Technology Holdings Limited Been A Good Investment?

The return of -90% over three years would not have pleased L.K. Technology Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

L.K. Technology Holdings pays its CEO a majority of compensation through a salary. The fact that shareholders have earned a negative share price return is certainly disconcerting. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for L.K. Technology Holdings you should be aware of, and 1 of them is potentially serious.

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.

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