We Take A Look At Whether Kinetix Systems Holdings Limited's (HKG:8606) CEO May Be Underpaid

Key Insights

• Kinetix Systems Holdings' Annual General Meeting to take place on 19th of June
• CEO Larry Yu's total compensation includes salary of HK$960.0k
• The overall pay is 38% below the industry average
• Over the past three years, Kinetix Systems Holdings' EPS grew by 41% and over the past three years, the total shareholder return was 52%

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Shareholders will be pleased by the impressive results for Kinetix Systems Holdings Limited (HKG:8606) recently and CEO Larry Yu has played a key role. This would be kept in mind at the upcoming AGM on 19th of June which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

View our latest analysis for Kinetix Systems Holdings

Comparing Kinetix Systems Holdings Limited's CEO Compensation With The Industry

According to our data, Kinetix Systems Holdings Limited has a market capitalization of HK$191m, and paid its CEO total annual compensation worth HK$975k over the year to December 2024. There was no change in the compensation compared to last year. We note that the salary portion, which stands at HK$960.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong IT industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.6m. This suggests that Larry Yu is paid below the industry median. What's more, Larry Yu holds HK$61m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 82% of total compensation represents salary, while the remainder of 18% is other remuneration. Kinetix Systems 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.

A Look at Kinetix Systems Holdings Limited's Growth Numbers

Kinetix Systems Holdings Limited has seen its earnings per share (EPS) increase by 41% a year over the past three years. Its revenue is up 8.5% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Kinetix Systems Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with Kinetix Systems Holdings Limited for providing a total return of 52% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Kinetix Systems Holdings pays its CEO a majority of compensation through a salary. Some shareholders will probably be more lenient on CEO compensation in the upcoming AGM given the pleasing performance of the company recently. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Kinetix Systems Holdings (2 are significant!) that you should be aware of before investing here.

Switching gears from Kinetix Systems 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.