Most Shareholders Will Probably Agree With Wing Chi Holdings Limited's (HKG:6080) CEO Compensation

Performance at Wing Chi Holdings Limited (HKG:6080) has been rather uninspiring recently and shareholders may be wondering how CEO Cheuk Kam Li plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 20 August 2021. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for Wing Chi Holdings

How Does Total Compensation For Cheuk Kam Li Compare With Other Companies In The Industry?

According to our data, Wing Chi Holdings Limited has a market capitalization of HK$125m, and paid its CEO total annual compensation worth HK$698k over the year to March 2021. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at HK$680.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.8m. In other words, Wing Chi Holdings pays its CEO lower than the industry median. What's more, Cheuk Kam Li holds HK$65m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	HK$680k	HK$675k	97%
Other	HK$18k	HK$18k	3%
Total Compensation	HK$698k	HK$693k	100%

Speaking on an industry level, nearly 90% of total compensation represents salary, while the remainder of 10% is other remuneration. Investors will find it interesting that Wing Chi Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Wing Chi Holdings Limited's Growth

Wing Chi Holdings Limited has reduced its earnings per share by 48% a year over the last three years. In the last year, its revenue is up 26%.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Wing Chi Holdings Limited Been A Good Investment?

The return of -73% over three years would not have pleased Wing Chi Holdings Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Cheuk Kam receives almost all of their compensation through a salary. The fact that shareholders have earned a negative share price return is certainly disconcerting. The poor performance of the share price might have something to do with the lack of earnings growth. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

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. In our study, we found 3 warning signs for Wing Chi Holdings you should be aware of, and 1 of them is a bit concerning.

Switching gears from Wing Chi 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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