How Much Is New Provenance Everlasting Holdings Limited (HKG:2326) Paying Its CEO?

This article will reflect on the compensation paid to Lik Man Sin who has served as CEO of New Provenance Everlasting Holdings Limited (HKG:2326) since 2018. This analysis will also assess whether New Provenance Everlasting Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for New Provenance Everlasting Holdings

How Does Total Compensation For Lik Man Sin Compare With Other Companies In The Industry?

According to our data, New Provenance Everlasting Holdings Limited has a market capitalization of HK$211m, and paid its CEO total annual compensation worth HK$3.0m over the year to March 2020. Notably, that's an increase of 27% over the year before. We note that the salary portion, which stands at HK$2.76m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.6m. So it looks like New Provenance Everlasting Holdings compensates Lik Man Sin in line with the median for the industry.

On an industry level, roughly 92% of total compensation represents salary and 7.7% is other remuneration. Although there is a difference in how total compensation is set, New Provenance Everlasting Holdings more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

New Provenance Everlasting Holdings Limited's Growth

New Provenance Everlasting Holdings Limited has reduced its earnings per share by 104% a year over the last three years. Its revenue is down 14% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has New Provenance Everlasting Holdings Limited Been A Good Investment?

Since shareholders would have lost about 94% over three years, some New Provenance Everlasting Holdings Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Lik Man is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

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. We identified 2 warning signs for New Provenance Everlasting Holdings (1 is significant!) that you should be aware of before investing here.

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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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