Should You Worry About Grand Ming Group Holdings Limited’s (HKG:1271) CEO Pay Cheque?

The CEO of Grand Ming Group Holdings Limited (HKG:1271) is Chi Lau. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Grand Ming Group Holdings

How Does Chi Lau’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Grand Ming Group Holdings Limited has a market cap of HK$3.4b, and reported total annual CEO compensation of HK$2.6m for the year to March 2019. That’s just a smallish increase of 1.7% on last year. We think total compensation is more important but we note that the CEO salary is lower, at HK$2.2m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$1.6b to HK$6.3b. The median total CEO compensation was HK$2.6m.

So Chi Lau receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see, below, how CEO compensation at Grand Ming Group Holdings has changed over time.

SEHK:1271 CEO Compensation, September 20th 2019
SEHK:1271 CEO Compensation, September 20th 2019

Is Grand Ming Group Holdings Limited Growing?

Grand Ming Group Holdings Limited has reduced its earnings per share by an average of 35% a year, over the last three years (measured with a line of best fit). Its revenue is down 57% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don’t have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Grand Ming Group Holdings Limited Been A Good Investment?

With a total shareholder return of 22% over three years, Grand Ming Group 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.

In Summary…

Chi Lau is paid around the same as most CEOs of similar size companies.

The company isn’t growing earnings per share, and nor have the total returns inspired us. We do not think the CEO pay is a problem, but one might argue that the company should improve returns to shareholders before increasing it. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Grand Ming Group Holdings.

Important note: Grand Ming Group Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.