Key Insights

• Dragon Rise Group Holdings' Annual General Meeting to take place on 16th of August
• CEO Yuk-Kit Yip's total compensation includes salary of HK$794.0k
• Total compensation is 62% below industry average
• Dragon Rise Group Holdings' EPS grew by 83% over the past three years while total shareholder return over the past three years was 5.0%

Shareholders will probably not be disappointed by the robust results at Dragon Rise Group Holdings Limited (HKG:6829) recently and they will be keeping this in mind as they go into the AGM on 16th of August. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

Comparing Dragon Rise Group Holdings Limited's CEO Compensation With The Industry

According to our data, Dragon Rise Group Holdings Limited has a market capitalization of HK$151m, and paid its CEO total annual compensation worth HK$860k over the year to March 2024. That is, the compensation was roughly the same as last year. Notably, the salary which is HK$794.0k, represents most of the total compensation being paid.

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. In other words, Dragon Rise Group Holdings pays its CEO lower than the industry median. Furthermore, Yuk-Kit Yip directly owns HK$112m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. It's interesting to note that Dragon Rise Group Holdings pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Dragon Rise Group Holdings Limited's Growth

Dragon Rise Group Holdings Limited's earnings per share (EPS) grew 83% per year over the last three years. Its revenue is up 20% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Dragon Rise Group Holdings Limited Been A Good Investment?

With a total shareholder return of 5.0% over three years, Dragon Rise Group Holdings Limited has done okay by shareholders, but there's always room for improvement. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

In Summary...

The company's overall performance, while not bad, could be better. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Dragon Rise Group Holdings (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: Dragon Rise Group 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.