Stock Analysis

A Quick Analysis On Suga International Holdings' (HKG:912) CEO Compensation

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SEHK:912
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The CEO of Suga International Holdings Limited (HKG:912) is Chi Ho Ng, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Suga International Holdings.

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

According to our data, Suga International Holdings Limited has a market capitalization of HK$425m, and paid its CEO total annual compensation worth HK$6.5m over the year to March 2020. Notably, that's a decrease of 17% over the year before. We note that the salary portion, which stands at HK$5.21m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$4.0m. Hence, we can conclude that Chi Ho Ng is remunerated higher than the industry median. Furthermore, Chi Ho Ng directly owns HK$259m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary HK$5.2m HK$4.9m 80%
Other HK$1.3m HK$2.9m 20%
Total CompensationHK$6.5m HK$7.8m100%

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. Although there is a difference in how total compensation is set, Suga International Holdings more or less reflects the market in terms of setting the salary. 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.

ceo-compensation
SEHK:912 CEO Compensation January 13th 2021

A Look at Suga International Holdings Limited's Growth Numbers

Over the last three years, Suga International Holdings Limited has shrunk its earnings per share by 23% per year. Its revenue is down 3.3% over the previous year.

The decline in EPS is a bit concerning. 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 Suga International Holdings Limited Been A Good Investment?

With a three year total loss of 26% for the shareholders, Suga International Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, Chi Ho is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Suga International Holdings you should be aware of, and 1 of them is a bit unpleasant.

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