Raymond Leung has been the CEO of Chi Ho Development Holdings Limited (HKG:8423) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Chi Ho Development Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for Chi Ho Development Holdings
How Does Total Compensation For Raymond Leung Compare With Other Companies In The Industry?
According to our data, Chi Ho Development Holdings Limited has a market capitalization of HK$198m, and paid its CEO total annual compensation worth HK$2.3m over the year to March 2020. That's a notable increase of 17% on last year. We note that the salary portion, which stands at HK$2.31m constitutes the majority of total compensation received by 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$2.0m. This suggests that Chi Ho Development Holdings remunerates its CEO largely in line with the industry average. What's more, Raymond Leung holds HK$90m 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$2.3m | HK$2.0m | 99% |
| Other | HK$18k | HK$18k | 1% |
| Total Compensation | HK$2.3m | HK$2.0m | 100% |
On an industry level, roughly 91% of total compensation represents salary and 8.7% is other remuneration. Chi Ho Development 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 Chi Ho Development Holdings Limited's Growth Numbers
Over the last three years, Chi Ho Development Holdings Limited has shrunk its earnings per share by 8.0% per year. It saw its revenue drop 2.0% over the last year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Chi Ho Development Holdings Limited Been A Good Investment?
With a three year total loss of 85% for the shareholders, Chi Ho Development Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
Chi Ho Development Holdings pays its CEO a majority of compensation through a salary. As previously discussed, Raymond is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
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 investors should think about before committing capital to this stock.
Switching gears from Chi Ho Development Holdings, 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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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:8423
Chi Ho Development Holdings
An investment holding company, provides building renovation and construction services in Hong Kong.
Good value with mediocre balance sheet.
