Stock Analysis

Suga International Holdings Limited's (HKG:912) CEO Compensation Is Looking A Bit Stretched At The Moment

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Under the guidance of CEO Chi Ho Ng, Suga International Holdings Limited (HKG:912) has performed reasonably well recently. As shareholders go into the upcoming AGM on 13 August 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Suga International Holdings

How Does Total Compensation For Chi Ho Ng Compare With Other Companies In The Industry?

At the time of writing, our data shows that Suga International Holdings Limited has a market capitalization of HK$621m, and reported total annual CEO compensation of HK$6.1m for the year to March 2021. That's a slight decrease of 6.5% on the prior year. We note that the salary portion, which stands at HK$4.88m constitutes the majority of total compensation received by the CEO.

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$3.5m. Accordingly, our analysis reveals that Suga International Holdings Limited pays Chi Ho Ng north of the industry median. Moreover, Chi Ho Ng also holds HK$373m worth of Suga International Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20212020Proportion (2021)
Salary HK$4.9m HK$5.2m 80%
Other HK$1.2m HK$1.3m 20%
Total CompensationHK$6.1m HK$6.5m100%

Talking in terms of the industry, salary represented approximately 80% of total compensation out of all the companies we analyzed, while other remuneration made up 20% of the pie. There isn't a significant difference between Suga International Holdings and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

SEHK:912 CEO Compensation August 6th 2021

A Look at Suga International Holdings Limited's Growth Numbers

Suga International Holdings Limited's earnings per share (EPS) grew 2.1% per year over the last three years. Its revenue is up 30% over the last year.

It's great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! 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 Suga International Holdings Limited Been A Good Investment?

With a total shareholder return of 21% over three years, Suga International Holdings Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which is a bit concerning) in Suga International Holdings we think you should know about.

Important note: Suga International Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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