Key Things To Understand About Fatfish Group's (ASX:FFG) CEO Pay Cheque

The CEO of Fatfish Group Limited (ASX:FFG) is Kin-Wai Lau, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Fatfish Group.

View our latest analysis for Fatfish Group

Comparing Fatfish Group Limited's CEO Compensation With the industry

At the time of writing, our data shows that Fatfish Group Limited has a market capitalization of AU$35m, and reported total annual CEO compensation of AU$152k for the year to December 2019. This means that the compensation hasn't changed much from last year. It is worth noting that the CEO compensation consists entirely of the salary, worth AU$152k.

On comparing similar-sized companies in the industry with market capitalizations below AU$265m, we found that the median total CEO compensation was AU$445k. In other words, Fatfish Group pays its CEO lower than the industry median. Moreover, Kin-Wai Lau also holds AU$1.1m worth of Fatfish Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. Speaking on a company level, Fatfish Group prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Fatfish Group Limited's Growth

Over the last three years, Fatfish Group Limited has shrunk its earnings per share by 69% per year. It saw its revenue drop 56% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Fatfish Group Limited Been A Good Investment?

Given the total shareholder loss of 44% over three years, many shareholders in Fatfish Group 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...

Fatfish Group pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Fatfish Group pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. It's tough to say that Kin-Wai is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 5 warning signs (and 1 which can't be ignored) in Fatfish Group we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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