Key Things To Understand About Oi Wah Pawnshop Credit Holdings' (HKG:1319) CEO Pay Cheque

Edward Chan has been the CEO of Oi Wah Pawnshop Credit Holdings Limited (HKG:1319) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Oi Wah Pawnshop Credit Holdings.

See our latest analysis for Oi Wah Pawnshop Credit Holdings

How Does Total Compensation For Edward Chan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Oi Wah Pawnshop Credit Holdings Limited has a market capitalization of HK$589m, and reported total annual CEO compensation of HK$6.8m for the year to February 2020. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$1.7m.

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$1.1m. Accordingly, our analysis reveals that Oi Wah Pawnshop Credit Holdings Limited pays Edward Chan north of the industry median. What's more, Edward Chan holds HK$16m 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 59% of total compensation represents salary and 41% is other remuneration. Oi Wah Pawnshop Credit Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Oi Wah Pawnshop Credit Holdings Limited's Growth Numbers

Oi Wah Pawnshop Credit Holdings Limited has seen its earnings per share (EPS) increase by 2.1% a year over the past three years. It saw its revenue drop 7.6% over the last year.

We would prefer it if there was revenue growth, 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. 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 Oi Wah Pawnshop Credit Holdings Limited Been A Good Investment?

Oi Wah Pawnshop Credit Holdings Limited has not done too badly by shareholders, with a total return of 9.6%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

As we noted earlier, Oi Wah Pawnshop Credit Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company lacks EPS growth, and returns to shareholders are less than stellar, over the last three years. Overall, although the company has delivered steady performance, we would like to see an improvement in key metrics before we can say the high CEO compensation is justified.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Oi Wah Pawnshop Credit Holdings that investors should think about before committing capital to this stock.

Important note: Oi Wah Pawnshop Credit 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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