Shareholders Will Probably Hold Off On Increasing Melco International Development Limited's (HKG:200) CEO Compensation For The Time Being

Key Insights

• Melco International Development to hold its Annual General Meeting on 5th of June
• Total pay for CEO Lawrence Ho includes HK$18.8m salary
• The overall pay is 9,769% above the industry average
• Melco International Development's three-year loss to shareholders was 15% while its EPS grew by 48% over the past three years

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In the past three years, the share price of Melco International Development Limited (HKG:200) has struggled to generate growth for its shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 5th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Melco International Development

How Does Total Compensation For Lawrence Ho Compare With Other Companies In The Industry?

According to our data, Melco International Development Limited has a market capitalization of HK$5.2b, and paid its CEO total annual compensation worth HK$214m over the year to December 2024. We note that's an increase of 18% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$19m.

For comparison, other companies in the Hong Kong Hospitality industry with market capitalizations ranging between HK$3.1b and HK$13b had a median total CEO compensation of HK$2.2m. Hence, we can conclude that Lawrence Ho is remunerated higher than the industry median. Furthermore, Lawrence Ho directly owns HK$2.6b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	HK$19m	HK$19m	9%
Other	HK$195m	HK$162m	91%
Total Compensation	HK$214m	HK$181m	100%

On an industry level, around 83% of total compensation represents salary and 17% is other remuneration. It's interesting to note that Melco International Development allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Melco International Development Limited's Growth Numbers

Melco International Development Limited's earnings per share (EPS) grew 48% per year over the last three years. It achieved revenue growth of 22% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Melco International Development Limited Been A Good Investment?

Given the total shareholder loss of 15% over three years, many shareholders in Melco International Development Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Melco International Development that investors should be aware of in a dynamic business environment.

Switching gears from Melco International Development, 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.