Here's What We Learned About The CEO Pay At Allan International Holdings Limited (HKG:684)

Albert Cheung is the CEO of Allan International Holdings Limited (HKG:684), and in this article, we analyze the executive's compensation package 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 Allan International Holdings.

See our latest analysis for Allan International Holdings

Comparing Allan International Holdings Limited's CEO Compensation With the industry

Our data indicates that Allan International Holdings Limited has a market capitalization of HK$527m, and total annual CEO compensation was reported as HK$4.9m for the year to March 2020. Notably, that's an increase of 83% over the year before. Notably, the salary which is HK$2.94m, represents most of the total compensation being paid.

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. This suggests that Allan International Holdings remunerates its CEO largely in line with the industry average. What's more, Albert Cheung holds HK$78m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. It's interesting to note that Allan International Holdings 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.

Allan International Holdings Limited's Growth

Over the last three years, Allan International Holdings Limited has shrunk its earnings per share by 90% per year. It saw its revenue drop 25% over the last 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Allan International Holdings Limited Been A Good Investment?

With a three year total loss of 13% for the shareholders, Allan International 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...

As we noted earlier, Allan International Holdings pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Allan International Holdings (1 is a bit concerning!) that you should be aware of before investing here.

Switching gears from Allan 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.

If you decide to trade Allan International Holdings, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.