How Much Did Reach New Holdings' (HKG:8471) CEO Pocket Last Year?

Gabi Lam is the CEO of Reach New Holdings Limited (HKG:8471), 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 Reach New Holdings.

Check out our latest analysis for Reach New Holdings

Comparing Reach New Holdings Limited's CEO Compensation With the industry

According to our data, Reach New Holdings Limited has a market capitalization of HK$238m, and paid its CEO total annual compensation worth CN¥933k over the year to December 2019. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is CN¥917.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥2.1m. Accordingly, Reach New Holdings pays its CEO under the industry median.

On an industry level, roughly 93% of total compensation represents salary and 7.4% is other remuneration. Reach New Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Reach New Holdings Limited's Growth

Reach New Holdings Limited has reduced its earnings per share by 35% a year over the last three years. It saw its revenue drop 26% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Reach New Holdings Limited Been A Good Investment?

Since shareholders would have lost about 34% over three years, some Reach New Holdings Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Reach New Holdings pays its CEO a majority of compensation through a salary. As we touched on above, Reach New 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. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for Reach New Holdings (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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