Key Things To Understand About Lai Group Holding's (HKG:8455) CEO Pay Cheque

Ka Sing Siu became the CEO of Lai Group Holding Company Limited (HKG:8455) in 2017, 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 Lai Group Holding.

Check out our latest analysis for Lai Group Holding

How Does Total Compensation For Ka Sing Siu Compare With Other Companies In The Industry?

Our data indicates that Lai Group Holding Company Limited has a market capitalization of HK$63m, and total annual CEO compensation was reported as HK$809k for the year to March 2020. That's just a smallish increase of 4.4% on last year. We note that the salary portion, which stands at HK$791.0k 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$1.4m. This suggests that Ka Sing Siu is paid below the industry median.

On an industry level, around 92% of total compensation represents salary and 8.4% is other remuneration. Lai Group Holding is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. 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 Lai Group Holding Company Limited's Growth Numbers

Over the last three years, Lai Group Holding Company Limited has shrunk its earnings per share by 67% per year. Its revenue is down 15% over the previous year.

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. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Lai Group Holding Company Limited Been A Good Investment?

With a three year total loss of 95% for the shareholders, Lai Group Holding Company Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Lai Group Holding pays its CEO a majority of compensation through a salary. As we noted earlier, Lai Group Holding pays its CEO lower than the norm for similar-sized companies belonging to the same industry. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. 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 identified 3 warning signs for Lai Group Holding (2 are potentially serious!) that you should be aware of before investing here.

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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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