Stock Analysis

We Discuss Why The CEO Of Ocean One Holding Ltd. (HKG:8476) Is Due For A Pay Rise

SEHK:8476
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The solid performance at Ocean One Holding Ltd. (HKG:8476) has been impressive and shareholders will probably be pleased to know that CEO Tsan Fong Chan Chan has delivered. At the upcoming AGM on 19 August 2021, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

View our latest analysis for Ocean One Holding

Comparing Ocean One Holding Ltd.'s CEO Compensation With the industry

According to our data, Ocean One Holding Ltd. has a market capitalization of HK$221m, and paid its CEO total annual compensation worth HK$888k over the year to March 2021. That's mostly flat as compared to the prior year's compensation. In particular, the salary of HK$802.0k, 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. Accordingly, Ocean One Holding pays its CEO under the industry median. What's more, Tsan Fong Chan Chan holds HK$159m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary HK$802k HK$816k 90%
Other HK$86k HK$86k 10%
Total CompensationHK$888k HK$902k100%

Speaking on an industry level, nearly 88% of total compensation represents salary, while the remainder of 12% is other remuneration. Our data reveals that Ocean One Holding allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
SEHK:8476 CEO Compensation August 12th 2021

A Look at Ocean One Holding Ltd.'s Growth Numbers

Ocean One Holding Ltd.'s earnings per share (EPS) grew 24% per year over the last three years. In the last year, its revenue is up 3.4%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Ocean One Holding Ltd. Been A Good Investment?

We think that the total shareholder return of 44%, over three years, would leave most Ocean One Holding Ltd. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Ocean One Holding that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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