Shareholders will probably not be too impressed with the underwhelming results at Luxey International (Holdings) Limited (HKG:8041) recently. At the upcoming AGM on 12 December 2022, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.
View our latest analysis for Luxey International (Holdings)
Comparing Luxey International (Holdings) Limited's CEO Compensation With The Industry
At the time of writing, our data shows that Luxey International (Holdings) Limited has a market capitalization of HK$242m, and reported total annual CEO compensation of HK$1.4m for the year to June 2022. Notably, that's an increase of 15% over the year before. We note that the salary portion, which stands at HK$1.19m constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.0m. So it looks like Luxey International (Holdings) compensates Hiu Kwan Chan in line with the median for the industry.
| Component | 2022 | 2021 | Proportion (2022) |
| Salary | HK$1.2m | HK$1.0m | 84% |
| Other | HK$224k | HK$208k | 16% |
| Total Compensation | HK$1.4m | HK$1.2m | 100% |
Talking in terms of the industry, salary represented approximately 93% of total compensation out of all the companies we analyzed, while other remuneration made up 7% of the pie. Although there is a difference in how total compensation is set, Luxey International (Holdings) 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:8041 CEO Compensation December 5th 2022A Look at Luxey International (Holdings) Limited's Growth Numbers
Over the last three years, Luxey International (Holdings) Limited has shrunk its earnings per share by 25% per year. In the last year, its revenue is down 8.8%.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Luxey International (Holdings) Limited Been A Good Investment?
The return of -44% over three years would not have pleased Luxey International (Holdings) Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which is concerning) in Luxey International (Holdings) we think you should know about.
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.