What Can We Conclude About Hong Kong Food Investment Holdings' (HKG:60) CEO Pay?

This article will reflect on the compensation paid to Ellis Man who has served as CEO of Hong Kong Food Investment Holdings Limited (HKG:60) since 2011. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Hong Kong Food Investment Holdings.

See our latest analysis for Hong Kong Food Investment Holdings

Comparing Hong Kong Food Investment Holdings Limited's CEO Compensation With the industry

According to our data, Hong Kong Food Investment Holdings Limited has a market capitalization of HK$174m, and paid its CEO total annual compensation worth HK$1.4m over the year to March 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of HK$1.34m, makes up a huge portion of the total compensation being paid to 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$1.3m. So it looks like Hong Kong Food Investment Holdings compensates Ellis Man in line with the median for the industry.

Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. Hong Kong Food Investment Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Hong Kong Food Investment Holdings Limited's Growth

Hong Kong Food Investment Holdings Limited has reduced its earnings per share by 73% a year over the last three years. It saw its revenue drop 19% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Hong Kong Food Investment Holdings Limited Been A Good Investment?

Given the total shareholder loss of 36% over three years, many shareholders in Hong Kong Food Investment Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Hong Kong Food Investment Holdings pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Hong Kong Food Investment Holdings that investors should look into moving forward.

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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