How Should Investors Feel About Dadi Education Holdings' (HKG:8417) CEO Remuneration?

Patrick Mok became the CEO of Dadi Education Holdings Limited (HKG:8417) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Dadi Education Holdings.

View our latest analysis for Dadi Education Holdings

How Does Total Compensation For Patrick Mok Compare With Other Companies In The Industry?

According to our data, Dadi Education Holdings Limited has a market capitalization of HK$49m, and paid its CEO total annual compensation worth HK$703k over the year to March 2020. That's just a smallish increase of 4.9% on last year. We note that the salary portion, which stands at HK$632.0k 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$1.5m. This suggests that Patrick Mok is paid below the industry median.

Speaking on an industry level, nearly 92% of total compensation represents salary, while the remainder of 8.4% is other remuneration. Our data reveals that Dadi Education Holdings allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Dadi Education Holdings Limited's Growth Numbers

Over the last three years, Dadi Education Holdings Limited has shrunk its earnings per share by 57% per year. In the last year, its revenue is down 16%.

Overall this is not a very positive result for shareholders. 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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Dadi Education Holdings Limited Been A Good Investment?

With a three year total loss of 97% for the shareholders, Dadi Education Holdings Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Patrick is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Dadi Education Holdings (of which 2 make us uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Dadi Education 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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