Why Eagle Nice (International) Holdings' (HKG:2368) CEO Pay Matters

This article will reflect on the compensation paid to Yuk Sing Chung who has served as CEO of Eagle Nice (International) Holdings Limited (HKG:2368) since 2013. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Eagle Nice (International) Holdings.

Check out our latest analysis for Eagle Nice (International) Holdings

How Does Total Compensation For Yuk Sing Chung Compare With Other Companies In The Industry?

Our data indicates that Eagle Nice (International) Holdings Limited has a market capitalization of HK$2.2b, and total annual CEO compensation was reported as HK$8.3m for the year to March 2020. That's a modest increase of 5.4% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$3.8m.

On examining similar-sized companies in the industry with market capitalizations between HK$775m and HK$3.1b, we discovered that the median CEO total compensation of that group was HK$4.2m. This suggests that Yuk Sing Chung is paid more than the median for the industry. Furthermore, Yuk Sing Chung directly owns HK$380m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 93% of total compensation represents salary and 7.2% is other remuneration. Eagle Nice (International) Holdings pays a modest slice of remuneration through salary, as compared 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.

A Look at Eagle Nice (International) Holdings Limited's Growth Numbers

Eagle Nice (International) Holdings Limited's earnings per share (EPS) grew 13% per year over the last three years. In the last year, its revenue is down 2.1%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Eagle Nice (International) Holdings Limited Been A Good Investment?

We think that the total shareholder return of 64%, over three years, would leave most Eagle Nice (International) Holdings Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

As we noted earlier, Eagle Nice (International) Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But EPS growth and shareholder returns have been top-notch for the past three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Yuk Sing's performance creates value for the company.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Eagle Nice (International) Holdings that investors should look into moving forward.

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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