What Can We Learn About V.S. International Group's (HKG:1002) CEO Compensation?

Sem Gan became the CEO of V.S. International Group Limited (HKG:1002) in 2001, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for V.S. International Group

How Does Total Compensation For Sem Gan Compare With Other Companies In The Industry?

Our data indicates that V.S. International Group Limited has a market capitalization of HK$462m, and total annual CEO compensation was reported as CN¥371k for the year to July 2020. Notably, that's a decrease of 61% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth CN¥371k.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.2m. Accordingly, V.S. International Group pays its CEO under the industry median. What's more, Sem Gan holds HK$15m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 86% of total compensation represents salary and 14% is other remuneration. Speaking on a company level, V.S. International Group prefers to tread along a traditional path, disbursing all compensation through a salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

V.S. International Group Limited's Growth

Over the last three years, V.S. International Group Limited has shrunk its earnings per share by 59% per year. Its revenue is down 26% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has V.S. International Group Limited Been A Good Investment?

With a three year total loss of 44% for the shareholders, V.S. International Group Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

V.S. International Group rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we touched on above, V.S. International Group Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for V.S. International Group (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

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.

When trading V.S. International Group or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.