How Much Did Golden Power Group Holdings' (HKG:3919) CEO Pocket Last Year?

Shuk Ching Chu became the CEO of Golden Power Group Holdings Limited (HKG:3919) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Golden Power Group Holdings

Comparing Golden Power Group Holdings Limited's CEO Compensation With the industry

According to our data, Golden Power Group Holdings Limited has a market capitalization of HK$97m, and paid its CEO total annual compensation worth HK$2.2m over the year to December 2019. That's a fairly small increase of 4.2% over the previous year. Notably, the salary which is HK$1.91m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.3m. This suggests that Shuk Ching Chu is paid more than the median for the industry. Moreover, Shuk Ching Chu also holds HK$810k worth of Golden Power Group Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 90% of total compensation represents salary and 9.8% is other remuneration. There isn't a significant difference between Golden Power Group Holdings and the broader market, in terms of salary allocation in the overall compensation package. 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 Golden Power Group Holdings Limited's Growth Numbers

Over the last three years, Golden Power Group Holdings Limited has shrunk its earnings per share by 36% per year. Its revenue is down 6.0% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Golden Power Group Holdings Limited Been A Good Investment?

Since shareholders would have lost about 55% over three years, some Golden Power Group Holdings Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Shuk Ching is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 4 warning signs for Golden Power Group Holdings that you should be aware of before investing.

Switching gears from Golden Power Group Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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