What Can We Make Of Mainland Headwear Holdings' (HKG:1100) CEO Compensation?
The CEO of Mainland Headwear Holdings Limited (HKG:1100) is Pauline Ngan, and this article examines 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.
View our latest analysis for Mainland Headwear Holdings
How Does Total Compensation For Pauline Ngan Compare With Other Companies In The Industry?
Our data indicates that Mainland Headwear Holdings Limited has a market capitalization of HK$385m, and total annual CEO compensation was reported as HK$5.5m for the year to December 2019. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$1.7m.
For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.4m. Hence, we can conclude that Pauline Ngan is remunerated higher than the industry median. Moreover, Pauline Ngan also holds HK$36m worth of Mainland Headwear Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | HK$1.7m | HK$1.6m | 31% |
| Other | HK$3.8m | HK$4.0m | 69% |
| Total Compensation | HK$5.5m | HK$5.6m | 100% |
On an industry level, around 93% of total compensation represents salary and 7.4% is other remuneration. Mainland Headwear Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Mainland Headwear Holdings Limited's Growth
Mainland Headwear Holdings Limited has reduced its earnings per share by 37% a year over the last three years. Its revenue is up 8.7% over the last year.
The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Mainland Headwear Holdings Limited Been A Good Investment?
Given the total shareholder loss of 23% over three years, many shareholders in Mainland Headwear Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As we touched on above, Mainland Headwear 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 good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 6 warning signs for Mainland Headwear Holdings you should be aware of, and 1 of them shouldn't be ignored.
Important note: Mainland Headwear 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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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:1100
Mainland Headwear Holdings
An investment holding company, designs, manufactures, trades in, and distributes casual headwear products in the United States, Europe, the People’s Republic of China, Hong Kong, and internationally.
Flawless balance sheet slight.
