How Does Grand Ming Group Holdings' (HKG:1271) CEO Pay Compare With Company Performance?

The CEO of Grand Ming Group Holdings Limited (HKG:1271) is Chi Wah Lau, and this article examines 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.

View our latest analysis for Grand Ming Group Holdings

Comparing Grand Ming Group Holdings Limited's CEO Compensation With the industry

Our data indicates that Grand Ming Group Holdings Limited has a market capitalization of HK$6.8b, and total annual CEO compensation was reported as HK$3.3m for the year to March 2020. We note that's an increase of 28% above last year. We note that the salary portion, which stands at HK$2.33m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from HK$3.1b to HK$12b, the reported median CEO total compensation was HK$2.5m. Accordingly, our analysis reveals that Grand Ming Group Holdings Limited pays Chi Wah Lau north of the industry median. What's more, Chi Wah Lau holds HK$510m 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 91% of total compensation represents salary and 8.7% is other remuneration. Grand Ming Group Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Grand Ming Group Holdings Limited's Growth Numbers

Over the last three years, Grand Ming Group Holdings Limited has shrunk its earnings per share by 26% per year. Its revenue is up 86% over the last year.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Grand Ming Group Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 149% over three years, Grand Ming Group Holdings Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

As previously discussed, Chi Wah is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But shareholder returns and revenue growth have been very healthy as we saw before. Importantly though, EPS has not been growing over the same stretch. Considering all the factors, we would have to say CEO pay is fair; however, moving forward, it would be nice to see EPS growth from the company as well.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 2 which are a bit concerning) in Grand Ming Group Holdings 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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