Key Things To Understand About Chen Hsong Holdings' (HKG:57) CEO Pay Cheque

Lai Yuen Chiang is the CEO of Chen Hsong Holdings Limited (HKG:57), 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 Chen Hsong Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Chen Hsong Holdings

Comparing Chen Hsong Holdings Limited's CEO Compensation With the industry

According to our data, Chen Hsong Holdings Limited has a market capitalization of HK$1.6b, and paid its CEO total annual compensation worth HK$2.6m over the year to March 2020. That is, the compensation was roughly the same as last year. In particular, the salary of HK$2.56m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between HK$775m and HK$3.1b had a median total CEO compensation of HK$2.6m. So it looks like Chen Hsong Holdings compensates Lai Yuen Chiang in line with the median for the industry. Moreover, Lai Yuen Chiang also holds HK$14m worth of Chen Hsong Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 86% of total compensation out of all the companies we analyzed, while other remuneration made up 14% of the pie. Investors will find it interesting that Chen Hsong Holdings 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.

Chen Hsong Holdings Limited's Growth

Chen Hsong Holdings Limited's earnings per share (EPS) grew 11% per year over the last three years. In the last year, its revenue is up 15%.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, 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 Chen Hsong Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with Chen Hsong Holdings Limited for providing a total return of 35% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Lai Yuen receives almost all of their compensation through a salary. As previously discussed, Lai Yuen is compensated close to the median for companies of its size, and which belong to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Indeed, many might consider that Lai Yuen is compensated rather modestly, given the solid company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

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 3 warning signs for Chen Hsong Holdings that you should be aware of before investing.

Switching gears from Chen Hsong 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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