What Can We Make Of G-Vision International (Holdings)'s (HKG:657) CEO Compensation?

The CEO of G-Vision International (Holdings) Limited (HKG:657) is Hop Fai Cheng, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether G-Vision International (Holdings) pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for G-Vision International (Holdings)

How Does Total Compensation For Hop Fai Cheng Compare With Other Companies In The Industry?

According to our data, G-Vision International (Holdings) Limited has a market capitalization of HK$191m, and paid its CEO total annual compensation worth HK$2.1m over the year to March 2020. Notably, that's a decrease of 15% over the year before. Notably, the salary which is HK$1.13m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.9m. So it looks like G-Vision International (Holdings) compensates Hop Fai Cheng in line with the median for the industry. What's more, Hop Fai Cheng holds HK$621k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 87% of total compensation represents salary and 13% is other remuneration. In G-Vision International (Holdings)'s case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 G-Vision International (Holdings) Limited's Growth Numbers

Over the last three years, G-Vision International (Holdings) Limited has shrunk its earnings per share by 38% per year. In the last year, its revenue is down 38%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 G-Vision International (Holdings) Limited Been A Good Investment?

With a three year total loss of 53% for the shareholders, G-Vision International (Holdings) Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, G-Vision International (Holdings) pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for G-Vision International (Holdings) (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from G-Vision International (Holdings), if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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