In the past three years, the share price of Medialink Group Limited (HKG:2230) has struggled to grow and now shareholders are sitting on a loss. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 21 September 2022, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.
Check out our latest analysis for Medialink Group
Comparing Medialink Group Limited's CEO Compensation With The Industry
Our data indicates that Medialink Group Limited has a market capitalization of HK$293m, and total annual CEO compensation was reported as HK$9.6m for the year to March 2018. That's a notable increase of 77% on last year. Notably, the salary which is HK$5.21m, represents a considerable chunk of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.2m. Accordingly, our analysis reveals that Medialink Group Limited pays Lovinia Chiu north of the industry median. Moreover, Lovinia Chiu also holds HK$211m worth of Medialink Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2018 | 2019 | Proportion (2018) |
| Salary | HK$5.2m | HK$2.0m | 54% |
| Other | HK$4.4m | HK$3.4m | 46% |
| Total Compensation | HK$9.6m | HK$5.4m | 100% |
Speaking on an industry level, nearly 53% of total compensation represents salary, while the remainder of 47% is other remuneration. Although there is a difference in how total compensation is set, Medialink Group more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
SEHK:2230 CEO Compensation September 14th 2022A Look at Medialink Group Limited's Growth Numbers
Over the last three years, Medialink Group Limited has shrunk its earnings per share by 33% per year. Its revenue is up 19% over the last year.
Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Medialink Group Limited Been A Good Investment?
Few Medialink Group Limited shareholders would feel satisfied with the return of -40% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company's remuneration policies and evaluate if the board's judgement and decision-making is aligned with that of the company's shareholders.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Medialink Group you should be aware of, and 1 of them shouldn't be ignored.
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.