Does Shen You Holdings' (HKG:8377) CEO Salary Compare Well With The Performance Of The Company?

The CEO of Shen You Holdings Limited (HKG:8377) is Albert Wong, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Shen You Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Shen You Holdings

How Does Total Compensation For Albert Wong Compare With Other Companies In The Industry?

At the time of writing, our data shows that Shen You Holdings Limited has a market capitalization of HK$58m, and reported total annual CEO compensation of HK$2.7m for the year to December 2019. Notably, that's an increase of 44% over the year before. In particular, the salary of HK$2.69m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.4m. So it looks like Shen You Holdings compensates Albert Wong in line with the median for the industry. Moreover, Albert Wong also holds HK$29m worth of Shen You 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, roughly 93% of total compensation represents salary and 7.4% is other remuneration. Shen You Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. 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.

A Look at Shen You Holdings Limited's Growth Numbers

Over the last three years, Shen You Holdings Limited has shrunk its earnings per share by 7.3% per year. It saw its revenue drop 28% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Shen You Holdings Limited Been A Good Investment?

Since shareholders would have lost about 87% over three years, some Shen You Holdings Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

Albert receives almost all of their compensation through a salary. As we touched on above, Shen You Holdings Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

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. We did our research and identified 3 warning signs (and 2 which don't sit too well with us) in Shen You Holdings we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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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