Keung Poon became the CEO of Vistar Holdings Limited (HKG:8535) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Vistar Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Vistar Holdings
How Does Total Compensation For Keung Poon Compare With Other Companies In The Industry?
According to our data, Vistar Holdings Limited has a market capitalization of HK$288m, and paid its CEO total annual compensation worth HK$1.2m over the year to March 2020. That's a fairly small increase of 4.2% over the previous year. We note that the salary portion, which stands at HK$1.13m constitutes the majority of total compensation received by 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 Keung Poon is paid below the industry median. Furthermore, Keung Poon directly owns HK$103m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$1.1m | HK$1.1m | 94% |
| Other | HK$68k | HK$68k | 6% |
| Total Compensation | HK$1.2m | HK$1.2m | 100% |
Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 8.8% is other remuneration. Our data reveals that Vistar 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.
Vistar Holdings Limited's Growth
Vistar Holdings Limited's earnings per share (EPS) grew 4.8% per year over the last three years. In the last year, its revenue is down 14%.
We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Vistar Holdings Limited Been A Good Investment?
Most shareholders would probably be pleased with Vistar Holdings Limited for providing a total return of 82% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
As we touched on above, Vistar Holdings Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. In contrast, shareholder returns have been excellent over the past three years, and that’s certainly a promising trend to keep an eye on. As a result of the juicy return to investors, CEO compensation may well be quite reasonable.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which is a bit concerning) in Vistar Holdings we think you should know about.
Switching gears from Vistar 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:8535
Vistar Holdings
An investment holding company, provides electrical and mechanical engineering services in Hong Kong.
Excellent balance sheet low.
