We Think Shareholders May Want To Consider A Review Of Chi Ho Development Holdings Limited's (HKG:8423) CEO Compensation Package

Shareholders will probably not be too impressed with the underwhelming results at Chi Ho Development Holdings Limited (HKG:8423) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 12 August 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Chi Ho Development Holdings

Comparing Chi Ho Development Holdings Limited's CEO Compensation With the industry

According to our data, Chi Ho Development Holdings Limited has a market capitalization of HK$224m, and paid its CEO total annual compensation worth HK$1.4m over the year to March 2021. We note that's a decrease of 40% compared to last year. Notably, the salary which is HK$1.39m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.8m. From this we gather that Raymond Leung is paid around the median for CEOs in the industry. Moreover, Raymond Leung also holds HK$93m worth of Chi Ho Development Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	HK$1.4m	HK$2.3m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$1.4m	HK$2.3m	100%

On an industry level, around 90% of total compensation represents salary and 10% is other remuneration. Chi Ho Development Holdings has gone down a largely traditional route, paying Raymond Leung a high salary, giving it preference over non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Chi Ho Development Holdings Limited's Growth

Over the last three years, Chi Ho Development Holdings Limited has shrunk its earnings per share by 2.5% per year. Its revenue is down 30% over the previous year.

Its a bit disappointing to see that the company has failed to grow its EPS. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Chi Ho Development Holdings Limited Been A Good Investment?

With a total shareholder return of -86% over three years, Chi Ho Development Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Chi Ho Development Holdings pays its CEO a majority of compensation through a salary. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Chi Ho Development Holdings that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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