Key Insights

• Luxey International (Holdings) will host its Annual General Meeting on 18th of December
• Total pay for CEO Hiu Kwan Chan includes HK$1.24m salary
• Total compensation is similar to the industry average
• Over the past three years, Luxey International (Holdings)'s EPS grew by 34% and over the past three years, the total loss to shareholders 43%

The underwhelming share price performance of Luxey International (Holdings) Limited (HKG:8041) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 18th of December. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Comparing Luxey International (Holdings) Limited's CEO Compensation With The Industry

Our data indicates that Luxey International (Holdings) Limited has a market capitalization of HK$195m, and total annual CEO compensation was reported as HK$2.2m for the year to June 2024. Notably, that's an increase of 27% over the year before. In particular, the salary of HK$1.24m, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Luxury industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. From this we gather that Hiu Kwan Chan is paid around the median for CEOs in the industry.

On an industry level, around 87% of total compensation represents salary and 13% is other remuneration. It's interesting to note that Luxey International (Holdings) allocates a smaller portion of compensation to salary in comparison 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.

Luxey International (Holdings) Limited's Growth

Over the past three years, Luxey International (Holdings) Limited has seen its earnings per share (EPS) grow by 34% per year. In the last year, its revenue is down 19%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Luxey International (Holdings) Limited Been A Good Investment?

Few Luxey International (Holdings) Limited shareholders would feel satisfied with the return of -43% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Luxey International (Holdings) that investors should be aware of in a dynamic business environment.

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.

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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.