Andy Kong became the CEO of WLS Holdings Limited (HKG:8021) in 2007, 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 assess whether WLS Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for WLS Holdings
How Does Total Compensation For Andy Kong Compare With Other Companies In The Industry?
Our data indicates that WLS Holdings Limited has a market capitalization of HK$488m, and total annual CEO compensation was reported as HK$1.0m for the year to April 2020. That's a slightly lower by 4.0% over the previous year. Notably, the salary which is HK$979.0k, 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$1.9m. Accordingly, WLS Holdings pays its CEO under the industry median.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$979k | HK$962k | 95% |
| Other | HK$48k | HK$108k | 5% |
| Total Compensation | HK$1.0m | HK$1.1m | 100% |
On an industry level, around 91% of total compensation represents salary and 8.7% is other remuneration. WLS Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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 WLS Holdings Limited's Growth Numbers
Over the last three years, WLS Holdings Limited has shrunk its earnings per share by 4.9% per year. It saw its revenue drop 23% over the last year.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has WLS Holdings Limited Been A Good Investment?
WLS Holdings Limited has served shareholders reasonably well, with a total return of 26% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
To Conclude...
WLS Holdings pays its CEO a majority of compensation through a salary. As we noted earlier, WLS Holdings pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been unexciting, and EPS growth has fared even worse. So, although we can't say CEO compensation is very high, shareholders might want to see an improvement in overall performance before agreeing that Andy deserves a bump.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for WLS Holdings (1 is potentially serious!) that you should be aware of before investing here.
Important note: WLS Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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About SEHK:8021
WLS Holdings
An investment holding company, provides scaffolding, fitting out, and other auxiliary services for the construction and building works businesses in Hong Kong.
Excellent balance sheet very low.
