This Is Why Vistar Holdings Limited's (HKG:8535) CEO Can Expect A Bump Up In Their Pay Packet

Shareholders will be pleased by the robust performance of Vistar Holdings Limited (HKG:8535) recently and this will be kept in mind in the upcoming AGM on 16 August 2021. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

View our latest analysis for Vistar Holdings

How Does Total Compensation For Keung Poon Compare With Other Companies In The Industry?

Our data indicates that Vistar Holdings Limited has a market capitalization of HK$504m, and total annual CEO compensation was reported as HK$1.2m for the year to March 2021. That's slightly lower by 3.7% over the previous year. In particular, the salary of HK$1.09m, 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$1.8m. In other words, Vistar Holdings pays its CEO lower than the industry median. Furthermore, Keung Poon directly owns HK$176m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
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 90% of total compensation represents salary, while the remainder of 10% is other remuneration. There isn't a significant difference between Vistar Holdings and the broader market, in terms of salary allocation in the overall compensation package. 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.

Vistar Holdings Limited's Growth

Vistar Holdings Limited has seen its earnings per share (EPS) increase by 6.0% a year over the past three years. In the last year, its revenue is up 30%.

We like the look of the strong year-on-year improvement in revenue. And in that context, the modest EPS improvement certainly isn't shabby. We wouldn't say this is necessarily top notch growth, but it is certainly promising. 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 Vistar Holdings Limited Been A Good Investment?

We think that the total shareholder return of 242%, over three years, would leave most Vistar Holdings Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

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 1 warning sign for Vistar Holdings that investors should think about before committing capital to this stock.

Important note: Vistar 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.

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