This article will reflect on the compensation paid to Jian Xue who has served as CEO of Kai Yuan Holdings Limited (HKG:1215) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Kai Yuan Holdings
Comparing Kai Yuan Holdings Limited's CEO Compensation With the industry
At the time of writing, our data shows that Kai Yuan Holdings Limited has a market capitalization of HK$498m, and reported total annual CEO compensation of HK$3.8m for the year to December 2019. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at HK$2.60m 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$2.0m. Hence, we can conclude that Jian Xue is remunerated higher than the industry median.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | HK$2.6m | HK$2.6m | 68% |
| Other | HK$1.2m | HK$1.2m | 32% |
| Total Compensation | HK$3.8m | HK$3.8m | 100% |
On an industry level, around 87% of total compensation represents salary and 13% is other remuneration. In Kai Yuan Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 Kai Yuan Holdings Limited's Growth Numbers
Kai Yuan Holdings Limited's earnings per share (EPS) grew 77% per year over the last three years. It saw its revenue drop 38% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Kai Yuan Holdings Limited Been A Good Investment?
Given the total shareholder loss of 33% over three years, many shareholders in Kai Yuan Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As we touched on above, Kai Yuan Holdings Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, we must not forget that the EPS growth has been very strong, but it's disappointing to see negative shareholder returns over the same period. Although we'd stop short of calling it inappropriate, we think Jian is earning a very handsome sum.
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 Kai Yuan 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.
When trading Kai Yuan Holdings or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
Valuation is complex, but we're here to simplify it.
Discover if Kai Yuan Holdings might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisThis 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
About SEHK:1215
Kai Yuan Holdings
An investment holding company, owns and operates hotels in Hong Kong and France.
Slightly overvalued with questionable track record.
