A Look At Travel Expert (Asia) Enterprises' (HKG:1235) CEO Remuneration

This article will reflect on the compensation paid to Hang Fan Cheng who has served as CEO of Travel Expert (Asia) Enterprises Limited (HKG:1235) since 2011. This analysis will also assess whether Travel Expert (Asia) Enterprises pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Travel Expert (Asia) Enterprises

How Does Total Compensation For Hang Fan Cheng Compare With Other Companies In The Industry?

At the time of writing, our data shows that Travel Expert (Asia) Enterprises Limited has a market capitalization of HK$87m, and reported total annual CEO compensation of HK$964k for the year to March 2020. That's a notable decrease of 14% on last year. We note that the salary portion, which stands at HK$946.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.0m. In other words, Travel Expert (Asia) Enterprises pays its CEO lower than the industry median. What's more, Hang Fan Cheng holds HK$1.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 87% of total compensation out of all the companies we analyzed, while other remuneration made up 13% of the pie. Travel Expert (Asia) Enterprises pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Travel Expert (Asia) Enterprises Limited's Growth Numbers

Travel Expert (Asia) Enterprises Limited has reduced its earnings per share by 100% a year over the last three years. In the last year, its revenue is down 58%.

The decline in EPS is a bit concerning. 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. 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 Travel Expert (Asia) Enterprises Limited Been A Good Investment?

Given the total shareholder loss of 69% over three years, many shareholders in Travel Expert (Asia) Enterprises 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...

Hang Fan receives almost all of their compensation through a salary. As previously discussed, Hang Fan is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. EPS growth has failed to impress us, and the same can be said about shareholder returns. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which is a bit concerning) in Travel Expert (Asia) Enterprises we think you should know about.

Important note: Travel Expert (Asia) Enterprises 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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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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