Our View On Vision Fame International Holding's (HKG:1315) CEO Pay

Chit Chau has been the CEO of Vision Fame International Holding Limited (HKG:1315) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Vision Fame International Holding.

See our latest analysis for Vision Fame International Holding

Comparing Vision Fame International Holding Limited's CEO Compensation With the industry

At the time of writing, our data shows that Vision Fame International Holding Limited has a market capitalization of HK$324m, and reported total annual CEO compensation of HK$2.4m for the year to March 2020. That's a slightly lower by 7.6% over the previous year. We note that the salary portion, which stands at HK$2.40m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. From this we gather that Chit Chau is paid around the median for CEOs in the industry. Furthermore, Chit Chau directly owns HK$31m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 91% of total compensation represents salary and 8.7% is other remuneration. Vision Fame International Holding pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Vision Fame International Holding Limited's Growth

Vision Fame International Holding Limited has seen its earnings per share (EPS) increase by 11% a year over the past three years. It achieved revenue growth of 348% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Vision Fame International Holding Limited Been A Good Investment?

Since shareholders would have lost about 86% over three years, some Vision Fame International Holding Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Chit receives almost all of their compensation through a salary. As previously discussed, Chit is compensated close to the median for companies of its size, and which belong to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Overall, we wouldn't say Chit is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for Vision Fame International Holding (of which 2 are a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Vision Fame International Holding is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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