Key Insights
- Steve Leung Design Group to hold its Annual General Meeting on 30th of May
- Salary of HK$3.24m is part of CEO Kenny Siu's total remuneration
- The total compensation is 108% higher than the average for the industry
- Steve Leung Design Group's EPS declined by 86% over the past three years while total shareholder loss over the past three years was 81%
Shareholders will probably not be too impressed with the underwhelming results at Steve Leung Design Group Limited (HKG:2262) recently. At the upcoming AGM on 30th of May, 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.
See our latest analysis for Steve Leung Design Group
Comparing Steve Leung Design Group Limited's CEO Compensation With The Industry
Our data indicates that Steve Leung Design Group Limited has a market capitalization of HK$153m, and total annual CEO compensation was reported as HK$3.7m for the year to December 2023. Notably, that's a decrease of 41% over the year before. In particular, the salary of HK$3.24m, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the Hong Kong Consumer Services industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.8m. Accordingly, our analysis reveals that Steve Leung Design Group Limited pays Kenny Siu north of the industry median.
| Component | 2023 | 2022 | Proportion (2023) |
| Salary | HK$3.2m | HK$3.8m | 88% |
| Other | HK$447k | HK$2.4m | 12% |
| Total Compensation | HK$3.7m | HK$6.2m | 100% |
Speaking on an industry level, nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. There isn't a significant difference between Steve Leung Design Group and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Steve Leung Design Group Limited's Growth Numbers
Steve Leung Design Group Limited has reduced its earnings per share by 86% a year over the last three years. It saw its revenue drop 6.6% over the last year.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. 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 Steve Leung Design Group Limited Been A Good Investment?
The return of -81% over three years would not have pleased Steve Leung Design Group Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Steve Leung Design Group (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.
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.