Yuk-Kit Yip became the CEO of Dragon Rise Group Holdings Limited (HKG:6829) in 2017, 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.
Check out our latest analysis for Dragon Rise Group Holdings
Comparing Dragon Rise Group Holdings Limited's CEO Compensation With the industry
At the time of writing, our data shows that Dragon Rise Group Holdings Limited has a market capitalization of HK$137m, and reported total annual CEO compensation of HK$837k for the year to March 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at HK$756.0k constitutes the majority of total compensation received by the CEO.
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, Dragon Rise Group Holdings pays its CEO under the industry median. What's more, Yuk-Kit Yip holds HK$102m 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$756k | HK$735k | 90% |
| Other | HK$81k | HK$81k | 10% |
| Total Compensation | HK$837k | HK$816k | 100% |
Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 8.8% is other remuneration. Our data reveals that Dragon Rise Group Holdings allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Dragon Rise Group Holdings Limited's Growth Numbers
Over the last three years, Dragon Rise Group Holdings Limited has shrunk its earnings per share by 117% per year. Its revenue is up 63% over the last year.
Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. 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 Dragon Rise Group Holdings Limited Been A Good Investment?
Given the total shareholder loss of 79% over three years, many shareholders in Dragon Rise Group Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As we touched on above, Dragon Rise Group Holdings Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But poor shareholder returns EPS growth have hampered the company over the past three years. On the flip side, recent revenue growth has been positive. So, although Yuk-Kit is modestly paid, shareholders might want to see positive shareholder returns before warming to the idea of a raise.
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. That's why we did our research, and identified 3 warning signs for Dragon Rise Group Holdings (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Dragon Rise 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.
When trading Dragon Rise Group Holdings or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
New: Manage All Your Stock Portfolios in One Place
We've created the ultimate portfolio companion for stock investors, and it's free.
• Connect an unlimited number of Portfolios and see your total in one currency
• Be alerted to new Warning Signs or Risks via email or mobile
• Track the Fair Value of your stocks
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
About SEHK:6829
Dragon Rise Group Holdings
An investment holding company, operates as a subcontractor of foundation works in Hong Kong.
Moderate with adequate balance sheet.
