What Does King's Flair International (Holdings)'s (HKG:6822) CEO Pay Reveal?

Alex Wong has been the CEO of King's Flair International (Holdings) Limited (HKG:6822) since 2012, 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 King's Flair International (Holdings).

Check out our latest analysis for King's Flair International (Holdings)

Comparing King's Flair International (Holdings) Limited's CEO Compensation With the industry

According to our data, King's Flair International (Holdings) Limited has a market capitalization of HK$959m, and paid its CEO total annual compensation worth HK$11m over the year to December 2019. That's a notable increase of 22% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$5.0m.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$4.0m. Accordingly, our analysis reveals that King's Flair International (Holdings) Limited pays Alex Wong north of the industry median. Moreover, Alex Wong also holds HK$575m worth of King's Flair International (Holdings) stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. It's interesting to note that King's Flair International (Holdings) allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at King's Flair International (Holdings) Limited's Growth Numbers

Over the last three years, King's Flair International (Holdings) Limited has shrunk its earnings per share by 3.3% per year. Its revenue is down 16% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. 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 King's Flair International (Holdings) Limited Been A Good Investment?

We think that the total shareholder return of 96%, over three years, would leave most King's Flair International (Holdings) Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As previously discussed, Alex is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. We're not seeing great strides in EPS, but the company has clearly pleased some investors, given the returns over the last three years. Considering positive investor returns, it would be bold of us to criticize CEO compensation, but shareholders might want to see healthier EPS growth before a raise is given out.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for King's Flair International (Holdings) (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from King's Flair International (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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