Our Take On EVA Precision Industrial Holdings' (HKG:838) CEO Salary

The CEO of EVA Precision Industrial Holdings Limited (HKG:838) is Yaohua Zhang, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for EVA Precision Industrial Holdings.

View our latest analysis for EVA Precision Industrial Holdings

How Does Total Compensation For Yaohua Zhang Compare With Other Companies In The Industry?

At the time of writing, our data shows that EVA Precision Industrial Holdings Limited has a market capitalization of HK$833m, and reported total annual CEO compensation of HK$10m for the year to December 2019. That's mostly flat as compared to the prior year's compensation. In particular, the salary of HK$5.76m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.4m. This suggests that Yaohua Zhang is paid more than the median for the industry. Moreover, Yaohua Zhang also holds HK$18m worth of EVA Precision Industrial Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 86% of total compensation represents salary, while the remainder of 14% is other remuneration. EVA Precision Industrial Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. 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 EVA Precision Industrial Holdings Limited's Growth Numbers

Over the last three years, EVA Precision Industrial Holdings Limited has shrunk its earnings per share by 55% per year. Its revenue is down 1.6% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has EVA Precision Industrial Holdings Limited Been A Good Investment?

Since shareholders would have lost about 49% over three years, some EVA Precision Industrial Holdings Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, EVA Precision Industrial Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for EVA Precision Industrial Holdings that investors should think about before committing capital to this stock.

Important note: EVA Precision Industrial 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.

If you’re looking to trade EVA Precision Industrial Holdings, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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@simplywallst.com.