Amy Donati became the CEO of EDICO Holdings Limited (HKG:8450) 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for EDICO Holdings
How Does Total Compensation For Amy Donati Compare With Other Companies In The Industry?
Our data indicates that EDICO Holdings Limited has a market capitalization of HK$65m, and total annual CEO compensation was reported as HK$1.5m for the year to September 2020. That's a notable decrease of 9.8% on last year. In particular, the salary of HK$1.38m, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.5m. So it looks like EDICO Holdings compensates Amy Donati in line with the median for the industry.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$1.4m | HK$1.5m | 91% |
| Other | HK$138k | HK$138k | 9% |
| Total Compensation | HK$1.5m | HK$1.7m | 100% |
Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. Although there is a difference in how total compensation is set, EDICO Holdings more or less reflects the market in terms of setting the salary. 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 EDICO Holdings Limited's Growth Numbers
Over the last three years, EDICO Holdings Limited has shrunk its earnings per share by 33% per year. Its revenue is up 22% over the last year.
Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 EDICO Holdings Limited Been A Good Investment?
Given the total shareholder loss of 72% over three years, many shareholders in EDICO Holdings Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we touched on above, EDICO Holdings Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But revenue growth seems to be inching northward, a heartening sign for the company. On the other hand, shareholder returns for Amy are negative over the same period. EPS growth is bleak as well, adding fuel to the fire. We'd say CEO compensation isn't unfair, but shareholders may be wary of a bump in pay before the company substantially improves overall performance.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for EDICO Holdings (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.
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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Access Free AnalysisThis 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:8450
EDICO Holdings
An investment holding company, provides integrated pre- and post-printing services to financial and capital markets in Hong Kong.
Flawless balance sheet slight.
