Should You Worry About Grand Ming Group Holdings Limited’s (HKG:1271) CEO Pay Cheque?

Chi Lau is the CEO of Grand Ming Group Holdings Limited (HKG:1271). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Grand Ming Group Holdings

How Does Chi Lau’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Grand Ming Group Holdings Limited has a market cap of HK$3.5b, and is paying total annual CEO compensation of HK$2.5m. (This is based on the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at HK$2.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$1.6b to HK$6.3b. The median total CEO compensation was HK$1.9m.

Thus we can conclude that Chi Lau receives more in total compensation than the median of a group of companies in the same market, and of similar size to Grand Ming Group Holdings Limited. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Grand Ming Group Holdings, below.

SEHK:1271 CEO Compensation, March 16th 2019
SEHK:1271 CEO Compensation, March 16th 2019

Is Grand Ming Group Holdings Limited Growing?

Over the last three years Grand Ming Group Holdings Limited has shrunk its earnings per share by an average of 36% per year (measured with a line of best fit). It saw its revenue drop -35% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. 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. Although we don’t have analyst forecasts, 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?

Grand Ming Group Holdings Limited has served shareholders reasonably well, with a total return of 28% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

We examined the amount Grand Ming Group Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

While shareholder returns are acceptable, they don’t delight. So we think more research is needed, but we don’t think the CEO underpaid. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Grand Ming Group Holdings (free visualization of insider trades).

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

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.