What Can We Learn About Kin Shing Holdings' (HKG:1630) CEO Compensation?

Dik Cheung Chow is the CEO of Kin Shing Holdings Limited (HKG:1630), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Kin Shing Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Kin Shing Holdings

Comparing Kin Shing Holdings Limited's CEO Compensation With the industry

According to our data, Kin Shing Holdings Limited has a market capitalization of HK$258m, and paid its CEO total annual compensation worth HK$970k over the year to March 2020. We note that's a small decrease of 5.0% on last year. In particular, the salary of HK$952.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.9m. In other words, Kin Shing Holdings pays its CEO lower than the industry median.

Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 8.7% is other remuneration. Kin Shing Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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 Kin Shing Holdings Limited's Growth Numbers

Kin Shing Holdings Limited has reduced its earnings per share by 113% a year over the last three years. Its revenue is down 36% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Kin Shing Holdings Limited Been A Good Investment?

Given the total shareholder loss of 96% over three years, many shareholders in Kin Shing Holdings Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Kin Shing Holdings pays its CEO a majority of compensation through a salary. As we touched on above, Kin Shing Holdings Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. It's tough to say that Dik Cheung is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 2 which can't be ignored) in Kin Shing Holdings we think you should know about.

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.

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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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