How Is Hong Kong ChaoShang Group's (HKG:2322) CEO Paid Relative To Peers?

Chi Yuen Chan has been the CEO of Hong Kong ChaoShang Group Limited (HKG:2322) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Hong Kong ChaoShang Group

How Does Total Compensation For Chi Yuen Chan Compare With Other Companies In The Industry?

According to our data, Hong Kong ChaoShang Group Limited has a market capitalization of HK$4.2b, and paid its CEO total annual compensation worth HK$3.6m over the year to March 2020. We note that's a small decrease of 3.7% on last year. We note that the salary portion, which stands at HK$3.57m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from HK$1.6b to HK$6.2b, we found that the median CEO total compensation was HK$2.4m. Accordingly, our analysis reveals that Hong Kong ChaoShang Group Limited pays Chi Yuen Chan north of the industry median.

On an industry level, roughly 92% of total compensation represents salary and 7.6% is other remuneration. Investors will find it interesting that Hong Kong ChaoShang Group pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Hong Kong ChaoShang Group Limited's Growth

Hong Kong ChaoShang Group Limited's earnings per share (EPS) grew 19% per year over the last three years. It achieved revenue growth of 87% 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. 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 Hong Kong ChaoShang Group Limited Been A Good Investment?

Boasting a total shareholder return of 59% over three years, Hong Kong ChaoShang Group 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.

In Summary...

Chi Yuen receives almost all of their compensation through a salary. As previously discussed, Chi Yuen is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Chi Yuen's performance creates value for the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Hong Kong ChaoShang Group that you should be aware of before investing.

Important note: Hong Kong ChaoShang Group 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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