What Can We Learn About World Houseware (Holdings)’s (HKG:713) CEO Compensation?

Mei Po Fung is the CEO of World Houseware (Holdings) Limited (HKG:713), and in this article, we analyze the executive’s compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for World Houseware (Holdings)

Comparing World Houseware (Holdings) Limited’s CEO Compensation With the industry

According to our data, World Houseware (Holdings) Limited has a market capitalization of HK$210m, and paid its CEO total annual compensation worth HK$3.4m over the year to December 2019. This means that the compensation hasn’t changed much from last year. We note that the salary portion, which stands at HK$3.43m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$3.5m. From this we gather that Mei Po Fung is paid around the median for CEOs in the industry. Furthermore, Mei Po Fung directly owns HK$17m worth of shares in the company, implying that they are deeply invested in the company’s success.

Component20192018Proportion (2019)
Salary HK$3.4m HK$3.4m 99%
Other HK$18k HK$19k 1%
Total CompensationHK$3.4m HK$3.4m100%

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. World Houseware (Holdings) pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.

ceo-compensation
SEHK:713 CEO Compensation August 1st 2020

A Look at World Houseware (Holdings) Limited’s Growth Numbers

World Houseware (Holdings) Limited’s earnings per share (EPS) grew 79% per year over the last three years. In the last year, its revenue is down 13%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. While we don’t have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has World Houseware (Holdings) Limited Been A Good Investment?

Given the total shareholder loss of 57% over three years, many shareholders in World Houseware (Holdings) Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

Mei Po receives almost all of their compensation through a salary. As previously discussed, Mei Po is compensated close to the median for companies of its size, and which belong to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. However, earnings growth is positive over the same time frame. Considering positive earnings growth, we’d say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

CEO compensation can have a massive impact on performance, but it’s just one element. That’s why we did some digging and identified 1 warning sign for World Houseware (Holdings) that investors should think about before committing capital to this stock.

Switching gears from World Houseware (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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