Here's Why Some Shareholders May Not Be Too Generous With Rich Goldman Holdings Limited's (HKG:70) CEO Compensation This Year

By
Simply Wall St
Published
November 23, 2021
SEHK:70
Source: Shutterstock

The disappointing performance at Rich Goldman Holdings Limited (HKG:70) will make some shareholders rather disheartened. The next AGM coming up on 30 November 2021 will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. From our analysis below, we think CEO compensation looks appropriate for now.

View our latest analysis for Rich Goldman Holdings

How Does Total Compensation For Andy Lin Compare With Other Companies In The Industry?

According to our data, Rich Goldman Holdings Limited has a market capitalization of HK$174m, and paid its CEO total annual compensation worth HK$673k over the year to June 2021. We note that's a decrease of 8.4% compared to last year. We note that the salary portion, which stands at HK$420.0k 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$1.8m. This suggests that Andy Lin is paid below the industry median.

Component20212020Proportion (2021)
Salary HK$420k HK$481k 62%
Other HK$253k HK$254k 38%
Total CompensationHK$673k HK$735k100%

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. It's interesting to note that Rich Goldman Holdings allocates a smaller portion of compensation to salary 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.

ceo-compensation
SEHK:70 CEO Compensation November 23rd 2021

A Look at Rich Goldman Holdings Limited's Growth Numbers

Over the last three years, Rich Goldman Holdings Limited has shrunk its earnings per share by 93% per year. In the last year, its revenue is down 5.3%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. 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 Rich Goldman Holdings Limited Been A Good Investment?

With a total shareholder return of -65% over three years, Rich Goldman Holdings Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is a bit concerning) in Rich Goldman Holdings we think you should know about.

Important note: Rich Goldman Holdings 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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Simply Wall St

Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.