The CEO of Major Holdings Limited (HKG:1389) is Joseph Leung, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Major Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Major Holdings
Comparing Major Holdings Limited's CEO Compensation With the industry
Our data indicates that Major Holdings Limited has a market capitalization of HK$126m, and total annual CEO compensation was reported as HK$1.0m for the year to March 2020. Notably, that's a decrease of 41% over the year before. We note that the salary portion, which stands at HK$1.00m 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$1.3m. From this we gather that Joseph Leung is paid around the median for CEOs in the industry. What's more, Joseph Leung holds HK$28m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$1.0m | HK$1.2m | 99% |
| Other | HK$15k | HK$518k | 1% |
| Total Compensation | HK$1.0m | HK$1.7m | 100% |
Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. Major 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.
A Look at Major Holdings Limited's Growth Numbers
Major Holdings Limited has reduced its earnings per share by 101% a year over the last three years. In the last year, its revenue is down 16%.
Overall this is not a very positive result for shareholders. 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. 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 Major Holdings Limited Been A Good Investment?
With a three year total loss of 68% for the shareholders, Major Holdings Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Major Holdings pays its CEO a majority of compensation through a salary. As we touched on above, Major 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. Meanwhile, EPS growth and shareholder returns have been in the red for 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. In our study, we found 2 warning signs for Major Holdings you should be aware of, and 1 of them is significant.
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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About SEHK:1389
Major Holdings
An investment holding company, engages in the sale and distribution of premium wine and spirits in Hong Kong and internationally.
Flawless balance sheet very low.
