Key insights

The results on FingerTango Inc. (HKG:6860) have been quite disappointing lately and CEO Jie Liu bears some responsibility for this. During the upcoming General Meeting on June 21, shareholders can hear from the board about their plans to improve performance. They also have the opportunity to influence managerial decision-making by voting on resolutions such as executive compensation, which could impact the company’s value in the future. We present the reason why we think CEO compensation is out of sync with business performance.

Check out our latest analysis for FingerTango

FingerTango Inc. CEO Compensation Comparison with the sector

According to our records, FingerTango Inc. a market capitalization of HK$157 million, and paid the CEO total annual compensation worth CN¥1.8 million for the year to December 2023. That’s a notable drop of 26% from last year. In particular, the salary, which amounts to CN¥1.60 million, represents the largest share of the total compensation paid out.

Compared to other companies in the Hong Kong entertainment industry with a market capitalization of less than HK$1.6 billion, the reported median total CEO compensation was CN¥1.2 million. This suggests that Jie Liu is paid more than the industry median. Furthermore, Jie Liu directly owns HK$83 million worth of shares in the company, implying that they are deeply invested in the company’s success.

Element 2023 2022 Share (2023)
Salary CN¥1.6 million CN¥2.2 million 87%
Other CN¥235k CN¥291k 13%
Total compensation CN¥1.8 million CN¥2.5 million 100%

In industry terms, salary represented around 89% of total compensation across all companies we analyzed, while other compensation made up 11% of the pie. While there is a difference in how total compensation is determined, FingerTango more or less reflects the market when it comes to setting salary. If salary dominates total compensation, this indicates that CEO pay is skewed less toward the variable component, which is typically related to performance.

CEO Compensation
SEHK:6860 CEO compensation June 14, 2024

The growth of FingerTango Inc

Over the past three years, FingerTango Inc. its earnings per share shrank by 63% per year. Last year, sales fell by 22%.

The decline in earnings per share is somewhat worrying. And the fact that sales are declining year after year may paint an ugly picture. These factors suggest that business performance would not really justify a high pay package for the CEO. While we don’t have analyst forecasts, you might want to review this data-rich visualization of earnings, revenue and cash flow.

Is FingerTango Inc. been a good investment?

Few shareholders of FingerTango Inc. would be satisfied with the -62% return over three years. So shareholders would likely want the company to be less generous with CEO compensation.

In summary…

In addition to the company’s poor performance, shareholders have suffered poor stock price returns on their investments, suggesting there is little to no chance they will be in favor of a CEO pay increase. At the upcoming AGM, they can question management’s plans and strategies to improve performance and reassess their investment thesis regarding the company.

CEO compensation is an important area to watch, but we should also pay attention to other characteristics of the company. We did our research and identified it 2 warning signs (and 1 we don’t like very much) in FingerTango that we think you should know about.

Switching from FingerTango, if you’re looking for impeccable balance and premium returns, this free list of companies with high returns and low debt is a great place to look.

Valuation is complex, but we help make it simple.

Invent or FingerTango may be over or undervalued if you look at our comprehensive analysis, including fair value estimates, risks and cautions, dividends, insider transactions and financial health.

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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to provide you with targeted, long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in the stocks mentioned.

Valuation is complex, but we help make it simple.

Invent or FingerTango may be over or undervalued if you look at our comprehensive analysis, including fair value estimates, risks and cautions, dividends, insider transactions and financial health.

View the Free Analysis

Do you have feedback on this article? Worried about the content? Please contact us directly. You can also send an email to [email protected]