Philip Chan is the CEO of KML Technology Group Limited (HKG:8065), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for KML Technology Group.
View our latest analysis for KML Technology Group
Comparing KML Technology Group Limited's CEO Compensation With the industry
Our data indicates that KML Technology Group Limited has a market capitalization of HK$124m, and total annual CEO compensation was reported as HK$1.7m for the year to March 2020. That's a notable decrease of 13% on last year. In particular, the salary of HK$1.20m, makes up a huge portion of the total compensation being paid to 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. This suggests that KML Technology Group remunerates its CEO largely in line with the industry average. What's more, Philip Chan holds HK$610k 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$1.2m | HK$1.2m | 71% |
| Other | HK$490k | HK$770k | 29% |
| Total Compensation | HK$1.7m | HK$1.9m | 100% |
On an industry level, around 91% of total compensation represents salary and 8.7% is other remuneration. KML Technology Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
KML Technology Group Limited's Growth
Over the past three years, KML Technology Group Limited has seen its earnings per share (EPS) grow by 108% per year. In the last year, its revenue is up 12%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has KML Technology Group Limited Been A Good Investment?
Given the total shareholder loss of 21% over three years, many shareholders in KML Technology Group Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As we noted earlier, KML Technology Group pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But on the bright side, EPS growth is positive over the same period. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 4 warning signs for KML Technology Group that investors should think about before committing capital to this stock.
Switching gears from KML Technology Group, 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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About SEHK:8065
KML Technology Group
An investment holding company, provides mechanical and electrical engineering solutions and services in Hong Kong, Taiwan, Canada, and internationally.
Mediocre balance sheet very low.
