Shareholders Will Most Likely Find Grand Ming Group Holdings Limited's (HKG:1271) CEO Compensation Acceptable

CEO Chi Wah Lau has done a decent job of delivering relatively good performance at Grand Ming Group Holdings Limited (HKG:1271) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 29 July 2021. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for Grand Ming Group Holdings

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

At the time of writing, our data shows that Grand Ming Group Holdings Limited has a market capitalization of HK$11b, and reported total annual CEO compensation of HK$3.2m for the year to March 2021. That's slightly lower by 3.6% over the previous year. We note that the salary portion, which stands at HK$2.53m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from HK$7.8b to HK$25b, we found that the median CEO total compensation was HK$4.1m. This suggests that Grand Ming Group Holdings remunerates its CEO largely in line with the industry average. Moreover, Chi Wah Lau also holds HK$834m worth of Grand Ming Group Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	HK$2.5m	HK$2.3m	80%
Other	HK$642k	HK$963k	20%
Total Compensation	HK$3.2m	HK$3.3m	100%

Speaking on an industry level, nearly 90% of total compensation represents salary, while the remainder of 10% is other remuneration. It's interesting to note that Grand Ming Group Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. 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.

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 4.6% per year. It achieved revenue growth of 65% 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 277% 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.

To Conclude...

The overall company performance has been commendable, however there are still areas for improvement. We reckon that there are some shareholders who may be hesitant to increase CEO pay further until EPS growth starts to improve, despite the robust revenue growth.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Grand Ming Group Holdings you should be aware of, and 1 of them can't be ignored.

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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