Here's Why Shareholders May Want To Be Cautious With Increasing Kaisa Capital Investment Holdings Limited's (HKG:936) CEO Pay Packet

Key Insights

• Kaisa Capital Investment Holdings' Annual General Meeting to take place on 28th of May
• CEO Wei Zheng's total compensation includes salary of HK$1.71m
• The overall pay is comparable to the industry average
• Kaisa Capital Investment Holdings' EPS grew by 9.5% over the past three years while total shareholder loss over the past three years was 64%

The underwhelming share price performance of Kaisa Capital Investment Holdings Limited (HKG:936) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 28th of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Kaisa Capital Investment Holdings

Comparing Kaisa Capital Investment Holdings Limited's CEO Compensation With The Industry

Our data indicates that Kaisa Capital Investment Holdings Limited has a market capitalization of HK$106m, and total annual CEO compensation was reported as HK$1.7m for the year to December 2024. We note that's a decrease of 11% compared to last year. In particular, the salary of HK$1.71m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Trade Distributors industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.1m. This suggests that Kaisa Capital Investment Holdings remunerates its CEO largely in line with the industry average.

Speaking on an industry level, nearly 92% of total compensation represents salary, while the remainder of 8% is other remuneration. Kaisa Capital Investment Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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.

Kaisa Capital Investment Holdings Limited's Growth

Kaisa Capital Investment Holdings Limited has seen its earnings per share (EPS) increase by 9.5% a year over the past three years. It saw its revenue drop 5.3% over the last year.

We generally like to see a little revenue growth, but the modest EPS growth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Kaisa Capital Investment Holdings Limited Been A Good Investment?

Few Kaisa Capital Investment Holdings Limited shareholders would feel satisfied with the return of -64% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Wei receives almost all of their compensation through a salary. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Kaisa Capital Investment Holdings (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Kaisa Capital 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.