The CEO of Rich Goldman Holdings Limited (HKG:70) is Andy Lin, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Rich Goldman Holdings
How Does Total Compensation For Andy Lin Compare With Other Companies In The Industry?
At the time of writing, our data shows that Rich Goldman Holdings Limited has a market capitalization of HK$149m, and reported total annual CEO compensation of HK$735k for the year to June 2020. We note that's an increase of 8.1% above last year. In particular, the salary of HK$481.0k, makes up a huge portion of the total compensation being paid to 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$1.9m. That is to say, Andy Lin is paid under the industry median.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$481k | HK$474k | 65% |
| Other | HK$254k | HK$206k | 35% |
| Total Compensation | HK$735k | HK$680k | 100% |
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. It's interesting to note that Rich Goldman Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Rich Goldman Holdings Limited's Growth
Rich Goldman Holdings Limited has seen its earnings per share (EPS) increase by 4.0% a year over the past three years. It saw its revenue drop 55% over the last year.
We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Rich Goldman Holdings Limited Been A Good Investment?
Since shareholders would have lost about 78% over three years, some Rich Goldman Holdings Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As previously discussed, Andy is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. But the EPS growth is lacking, just like the returns (over three years). We're not critical of the remuneration Andy receives, but it would be good to see improved returns to shareholders before compensation grows too much.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Rich Goldman Holdings that investors should look into moving forward.
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.
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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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About SEHK:70
Rich Goldman Holdings
An investment holding company, engages in the money lending business in the People Republic of China, and Hong Kong.
Excellent balance sheet low.
