Key Insights

• Lee Kee Holdings' Annual General Meeting to take place on 27th of August
• Total pay for CEO Clara Chan includes HK$2.59m salary
• Total compensation is 46% above industry average
• Over the past three years, Lee Kee Holdings' EPS fell by 107% and over the past three years, the total loss to shareholders 48%

Lee Kee Holdings Limited (HKG:637) has not performed well recently and CEO Clara Chan will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 27th of August. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Comparing Lee Kee Holdings Limited's CEO Compensation With The Industry

According to our data, Lee Kee Holdings Limited has a market capitalization of HK$127m, and paid its CEO total annual compensation worth HK$3.2m over the year to March 2024. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is HK$2.59m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Trade Distributors industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.2m. This suggests that Clara Chan is paid more than the median for the industry.

Talking in terms of the industry, salary represented approximately 94% of total compensation out of all the companies we analyzed, while other remuneration made up 6% of the pie. Lee Kee Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. 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.

Lee Kee Holdings Limited's Growth

Lee Kee Holdings Limited has reduced its earnings per share by 107% a year over the last three years. It saw its revenue drop 23% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Lee Kee Holdings Limited Been A Good Investment?

With a total shareholder return of -48% over three years, Lee Kee Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Lee Kee Holdings that you should be aware of before investing.

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.