The results at Kiddieland International Limited (HKG:3830) have been quite disappointing recently and CEO Kenneth Lo bears some responsibility for this. At the upcoming AGM on 30 September 2022, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.
Check out our latest analysis for Kiddieland International
How Does Total Compensation For Kenneth Lo Compare With Other Companies In The Industry?
At the time of writing, our data shows that Kiddieland International Limited has a market capitalization of HK$100m, and reported total annual CEO compensation of HK$2.2m for the year to April 2022. That's just a smallish increase of 5.7% on last year. We note that the salary portion, which stands at HK$1.99m constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.3m. From this we gather that Kenneth Lo is paid around the median for CEOs in the industry.
| Component | 2022 | 2021 | Proportion (2022) |
| Salary | HK$2.0m | HK$2.0m | 89% |
| Other | HK$252k | HK$132k | 11% |
| Total Compensation | HK$2.2m | HK$2.1m | 100% |
Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. Although there is a difference in how total compensation is set, Kiddieland International more or less reflects the market in terms of setting the salary. 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.
SEHK:3830 CEO Compensation September 23rd 2022A Look at Kiddieland International Limited's Growth Numbers
Over the last three years, Kiddieland International Limited has shrunk its earnings per share by 41% per year. Its revenue is down 19% over the previous year.
Few shareholders would be pleased to read that EPS have declined. 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. 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 Kiddieland International Limited Been A Good Investment?
Given the total shareholder loss of 16% over three years, many shareholders in Kiddieland International Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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 it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Kiddieland International that you should be aware of before investing.
Switching gears from Kiddieland International, 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.