What Can We Learn About Yue Yuen Industrial (Holdings)'s (HKG:551) CEO Compensation?

Patty Tsai has been the CEO of Yue Yuen Industrial (Holdings) Limited (HKG:551) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Yue Yuen Industrial (Holdings).

Check out our latest analysis for Yue Yuen Industrial (Holdings)

Comparing Yue Yuen Industrial (Holdings) Limited's CEO Compensation With the industry

According to our data, Yue Yuen Industrial (Holdings) Limited has a market capitalization of HK$26b, and paid its CEO total annual compensation worth US$347k over the year to December 2019. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$142k.

For comparison, other companies in the same industry with market capitalizations ranging between HK$16b and HK$50b had a median total CEO compensation of US$676k. That is to say, Patty Tsai is paid under the industry median.

Speaking on an industry level, nearly 93% of total compensation represents salary, while the remainder of 7.4% is other remuneration. Yue Yuen Industrial (Holdings) sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Yue Yuen Industrial (Holdings) Limited's Growth Numbers

Over the last three years, Yue Yuen Industrial (Holdings) Limited has shrunk its earnings per share by 70% per year. It saw its revenue drop 14% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Yue Yuen Industrial (Holdings) Limited Been A Good Investment?

Since shareholders would have lost about 30% over three years, some Yue Yuen Industrial (Holdings) Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Yue Yuen Industrial (Holdings) Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. It's tough to say that Patty is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Yue Yuen Industrial (Holdings) that investors should think about before committing capital to this stock.

Switching gears from Yue Yuen Industrial (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.

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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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