Is Kin Yat Holdings Limited's (HKG:638) CEO Paid Enough Relative To Peers?

Chor Kit Cheng is the CEO of Kin Yat Holdings Limited (HKG:638). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Kin Yat Holdings

How Does Chor Kit Cheng's Compensation Compare With Similar Sized Companies?

Our data indicates that Kin Yat Holdings Limited is worth HK$298m, and total annual CEO compensation was reported as HK$4.5m for the year to March 2019. Notably, the salary of HK$4.5m is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO total compensation was HK$1.8m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Kin Yat Holdings. On an industry level, roughly 66% of total compensation represents salary and 34% is other remuneration. Speaking on a company level, Kin Yat Holdings prefers to tread along a traditional path, disbursing all compensation through a salary.

Thus we can conclude that Chor Kit Cheng receives more in total compensation than the median of a group of companies in the same market, and of similar size to Kin Yat Holdings Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. You can see a visual representation of the CEO compensation at Kin Yat Holdings, below.

Is Kin Yat Holdings Limited Growing?

On average over the last three years, Kin Yat Holdings Limited has seen earnings per share (EPS) move in a favourable direction by 6.6% each year (using a line of best fit). Its revenue is up 9.1% over last year.

I'm not particularly impressed by the revenue growth, but I'm happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Kin Yat Holdings Limited Been A Good Investment?

With a three year total loss of 60%, Kin Yat Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at Kin Yat Holdings Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Looking into other areas, we've picked out 3 warning signs for Kin Yat Holdings that investors should think about before committing capital to this stock.

If you want to buy a stock that is better than Kin Yat Holdings, 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. Thank you for reading.