Here's What We Think About Goodbaby International Holdings' (HKG:1086) CEO Pay

This article will reflect on the compensation paid to Martin Pos who has served as CEO of Goodbaby International Holdings Limited (HKG:1086) since 2016. This analysis will also assess whether Goodbaby International Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Goodbaby International Holdings

Comparing Goodbaby International Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that Goodbaby International Holdings Limited has a market capitalization of HK$1.7b, and reported total annual CEO compensation of HK$31m for the year to December 2019. We note that's an increase of 26% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$13m.

In comparison with other companies in the industry with market capitalizations ranging from HK$775m to HK$3.1b, the reported median CEO total compensation was HK$2.9m. This suggests that Martin Pos is paid more than the median for the industry. Moreover, Martin Pos also holds HK$50m worth of Goodbaby International Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 72% of total compensation out of all the companies we analyzed, while other remuneration made up 28% of the pie. In Goodbaby International Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Goodbaby International Holdings Limited's Growth

Goodbaby International Holdings Limited has reduced its earnings per share by 29% a year over the last three years. In the last year, its revenue is down 6.7%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Goodbaby International Holdings Limited Been A Good Investment?

Given the total shareholder loss of 75% over three years, many shareholders in Goodbaby International Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Goodbaby International Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

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 Goodbaby International Holdings that investors should think about before committing capital to this stock.

Switching gears from Goodbaby International 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.

When trading Goodbaby International Holdings or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.