Huasheng International Holding Limited's (HKG:1323) CEO Compensation Is Looking A Bit Stretched At The Moment

Performance at Huasheng International Holding Limited (HKG:1323) has been reasonably good and CEO Wai Sing Wong has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 13 August 2021. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Huasheng International Holding

Comparing Huasheng International Holding Limited's CEO Compensation With the industry

At the time of writing, our data shows that Huasheng International Holding Limited has a market capitalization of HK$4.1b, and reported total annual CEO compensation of HK$11m for the year to March 2021. That is, the compensation was roughly the same as last year. In particular, the salary of HK$6.75m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between HK$1.6b and HK$6.2b, we discovered that the median CEO total compensation of that group was HK$2.8m. This suggests that Wai Sing Wong is paid more than the median for the industry. Moreover, Wai Sing Wong also holds HK$563m worth of Huasheng International Holding 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$6.8m	HK$7.0m	62%
Other	HK$4.1m	HK$4.1m	38%
Total Compensation	HK$11m	HK$11m	100%

On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. Our data reveals that Huasheng International Holding allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Huasheng International Holding Limited's Growth

Huasheng International Holding Limited's earnings per share (EPS) grew 29% per year over the last three years. In the last year, its revenue is up 354%.

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 Huasheng International Holding Limited Been A Good Investment?

Most shareholders would probably be pleased with Huasheng International Holding Limited for providing a total return of 105% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Huasheng International Holding that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

If you’re looking to trade a wide range of investments, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade 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 (at) simplywallst.com.