Andrew Tam is the CEO of IMS Group Holdings Limited (HKG:8136), 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 IMS Group Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for IMS Group Holdings
How Does Total Compensation For Andrew Tam Compare With Other Companies In The Industry?
Our data indicates that IMS Group Holdings Limited has a market capitalization of HK$70m, and total annual CEO compensation was reported as HK$2.6m for the year to March 2020. We note that's an increase of 18% above last year. In particular, the salary of HK$2.17m, 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$1.2m. Accordingly, our analysis reveals that IMS Group Holdings Limited pays Andrew Tam north of the industry median. Furthermore, Andrew Tam directly owns HK$34m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$2.2m | HK$2.1m | 85% |
| Other | HK$388k | HK$18k | 15% |
| Total Compensation | HK$2.6m | HK$2.2m | 100% |
On an industry level, roughly 90% of total compensation represents salary and 9.8% is other remuneration. Our data reveals that IMS 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 IMS Group Holdings Limited's Growth Numbers
IMS Group Holdings Limited has seen its earnings per share (EPS) increase by 16% a year over the past three years. In the last year, its revenue is down 51%.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has IMS Group Holdings Limited Been A Good Investment?
With a three year total loss of 86% for the shareholders, IMS Group Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As we touched on above, IMS Group Holdings Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company has impressed with its EPS growth, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 4 warning signs for IMS Group Holdings (2 can't be ignored!) that you should be aware of before investing here.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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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About SEHK:8136
IMS Group Holdings
An investment holding company, engages in the provision of light-emitting diode (LED) lighting fixtures for retail stores of luxury brands in Hong Kong, the People’s Republic of China, the rest of Asia, Europe, and internationally.
Flawless balance sheet and slightly overvalued.
