The CEO of Karrie International Holdings Limited (HKG:1050) is Cheuk Fai Ho, and this article examines the executive’s compensation against the backdrop of overall company performance. This analysis will also assess whether Karrie International Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Cheuk Fai Ho Compare With Other Companies In The Industry?
Our data indicates that Karrie International Holdings Limited has a market capitalization of HK$2.3b, and total annual CEO compensation was reported as HK$7.5m for the year to March 2020. That’s just a smallish increase of 4.4% on last year. In particular, the salary of HK$4.74m, makes up a huge portion of the total compensation being paid to the CEO.
On examining similar-sized companies in the industry with market capitalizations between HK$775m and HK$3.1b, we discovered that the median CEO total compensation of that group was HK$3.0m. Accordingly, our analysis reveals that Karrie International Holdings Limited pays Cheuk Fai Ho north of the industry median. Moreover, Cheuk Fai Ho also holds HK$318m worth of Karrie International Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 76% of total compensation represents salary and 24% is other remuneration. It’s interesting to note that Karrie International Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.
Karrie International Holdings Limited’s Growth
Over the past three years, Karrie International Holdings Limited has seen its earnings per share (EPS) grow by 9.7% per year. In the last year, its revenue is up 9.4%.
We would argue that the improvement in revenue is good, but isn’t particularly impressive, but the modest improvement in EPS is good. Considering these factors we’d say performance has been pretty decent, though not amazing. Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Karrie International Holdings Limited Been A Good Investment?
With a total shareholder return of 11% over three years, Karrie International Holdings Limited shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
As previously discussed, Cheuk Fai is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, EPS growth is not moving in the right direction, and the returns to shareholders could have been better, over the last three years. Overall, although the company has delivered steady performance, we would like to see an improvement in key metrics before we can say the high CEO compensation is justified.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That’s why we did our research, and identified 2 warning signs for Karrie International Holdings (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Karrie International Holdings, 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. 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.
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