How Should Investors React To Tai Ping Carpets International's (HKG:146) CEO Pay?

This article will reflect on the compensation paid to Mark Stuart Worgan who has served as CEO of Tai Ping Carpets International Limited (HKG:146) since 2018. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Tai Ping Carpets International.

Check out our latest analysis for Tai Ping Carpets International

How Does Total Compensation For Mark Stuart Worgan Compare With Other Companies In The Industry?

According to our data, Tai Ping Carpets International Limited has a market capitalization of HK$233m, and paid its CEO total annual compensation worth HK$8.4m over the year to June 2020. That's a notable increase of 17% on last year. In particular, the salary of HK$4.62m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$4.0m. This suggests that Mark Stuart Worgan is paid more than the median for the industry.

On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. It's interesting to note that Tai Ping Carpets International allocates a smaller portion of compensation to salary in comparison to the broader industry. 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.

Tai Ping Carpets International Limited's Growth

Tai Ping Carpets International Limited's earnings per share (EPS) grew 82% per year over the last three years. In the last year, its revenue is down 8.5%.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Tai Ping Carpets International Limited Been A Good Investment?

With a three year total loss of 34% for the shareholders, Tai Ping Carpets International Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Tai Ping Carpets International 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. But the company has impressed with its EPS growth, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Considering overall performance, we can't say Mark Stuart is underpaid, in fact compensation is definitely on the higher side.

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 2 warning signs for Tai Ping Carpets International (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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