Key Insights

• Kidztech Holdings to hold its Annual General Meeting on 16th of August
• Total pay for CEO Huang Yu includes CN¥1.00m salary
• Total compensation is 36% below industry average
• Kidztech Holdings' EPS declined by 103% over the past three years while total shareholder loss over the past three years was 89%

The underwhelming performance at Kidztech Holdings Limited (HKG:6918) recently has probably not pleased shareholders. The next AGM coming up on 16th of August will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

How Does Total Compensation For Huang Yu Compare With Other Companies In The Industry?

At the time of writing, our data shows that Kidztech Holdings Limited has a market capitalization of HK$106m, and reported total annual CEO compensation of CN¥1.0m for the year to December 2023. We note that's an increase of 18% above last year. Notably, the salary which is CN¥1.00m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Leisure industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.6m. Accordingly, Kidztech Holdings pays its CEO under the industry median. What's more, Huang Yu holds HK$35m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 92% of total compensation represents salary and 8% is other remuneration. Kidztech Holdings has gone down a largely traditional route, paying Huang Yu a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Kidztech Holdings Limited's Growth Numbers

Over the last three years, Kidztech Holdings Limited has shrunk its earnings per share by 103% per year. In the last year, its revenue is down 22%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Kidztech Holdings Limited Been A Good Investment?

With a total shareholder return of -89% over three years, Kidztech Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Kidztech Holdings pays its CEO a majority of compensation through a salary. 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.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for Kidztech Holdings (of which 2 are a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Kidztech Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.