This article will reflect on the compensation paid to Choi Wah Ng who has served as CEO of Ching Lee Holdings Limited (HKG:3728) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Ching Lee Holdings.
View our latest analysis for Ching Lee Holdings
How Does Total Compensation For Choi Wah Ng Compare With Other Companies In The Industry?
According to our data, Ching Lee Holdings Limited has a market capitalization of HK$192m, and paid its CEO total annual compensation worth HK$10.0m over the year to March 2020. Notably, that's an increase of 26% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$3.3m.
For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. Accordingly, our analysis reveals that Ching Lee Holdings Limited pays Choi Wah Ng north of the industry median. What's more, Choi Wah Ng holds HK$132m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$3.3m | HK$3.0m | 33% |
| Other | HK$6.6m | HK$4.8m | 67% |
| Total Compensation | HK$10.0m | HK$7.9m | 100% |
Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 8.7% is other remuneration. In Ching Lee Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Ching Lee Holdings Limited's Growth
Over the last three years, Ching Lee Holdings Limited has shrunk its earnings per share by 19% per year. In the last year, its revenue is up 52%.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Ching Lee Holdings Limited Been A Good Investment?
With a three year total loss of 48% for the shareholders, Ching Lee Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As previously discussed, Choi Wah is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. It concerns us that EPS growth for the company is negative, while share price gains did not materialize over the last three years. On a more positive note, the company has produced a more positive revenue growth more recently. Suffice it to say, we don't think the CEO is underpaid!
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 did our research and identified 6 warning signs (and 2 which are a bit unpleasant) in Ching Lee Holdings we think you should know about.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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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About SEHK:3728
Ching Lee Holdings
An investment holding company, engages in the provision of construction, consultancy, and project management services primarily in Hong Kong.
Mediocre balance sheet and slightly overvalued.
