How Does Hanison Construction Holdings' (HKG:896) CEO Pay Compare With Company Performance?

The CEO of Hanison Construction Holdings Limited (HKG:896) is Stewart Wong, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Hanison Construction Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Hanison Construction Holdings

Comparing Hanison Construction Holdings Limited's CEO Compensation With the industry

According to our data, Hanison Construction Holdings Limited has a market capitalization of HK$1.1b, and paid its CEO total annual compensation worth HK$27m over the year to March 2020. We note that's a decrease of 12% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$3.8m.

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 Stewart Wong is paid more than the median for the industry. Furthermore, Stewart Wong directly owns HK$42m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 8.7% is other remuneration. It's interesting to note that Hanison Construction Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Hanison Construction Holdings Limited's Growth

Over the last three years, Hanison Construction Holdings Limited has shrunk its earnings per share by 33% per year. In the last year, its revenue changed by just 0.5%.

The decline in EPS is a bit concerning. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Hanison Construction Holdings Limited Been A Good Investment?

Hanison Construction Holdings Limited has generated a total shareholder return of 15% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As we touched on above, Hanison Construction Holdings Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look great when you realize that the company has been suffering from negative EPS growth for the last three years. While shareholder returns are acceptable, they don't delight. So you can understand why we do not think CEO compensation is particularly modest!

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 5 warning signs (and 2 which are concerning) in Hanison Construction Holdings we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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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