There Could Be A Chance Differ Group Holding Company Limited's (HKG:6878) CEO Will Have Their Compensation Increased

Shareholders will be pleased by the robust performance of Differ Group Holding Company Limited (HKG:6878) recently and this will be kept in mind in the upcoming AGM on 29 June 2021. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

View our latest analysis for Differ Group Holding

Comparing Differ Group Holding Company Limited's CEO Compensation With the industry

According to our data, Differ Group Holding Company Limited has a market capitalization of HK$12b, and paid its CEO total annual compensation worth CN¥580k over the year to December 2020. Notably, that's a decrease of 33% over the year before. In particular, the salary of CN¥510.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the same industry with market caps ranging from HK$7.8b to HK$25b, we found that the median CEO total compensation was CN¥5.8m. In other words, Differ Group Holding pays its CEO lower than the industry median. Moreover, Chi Chung Ng also holds HK$1.9b worth of Differ Group Holding stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	CN¥510k	CN¥534k	88%
Other	CN¥70k	CN¥330k	12%
Total Compensation	CN¥580k	CN¥864k	100%

Talking in terms of the industry, salary represented approximately 79% of total compensation out of all the companies we analyzed, while other remuneration made up 21% of the pie. Differ Group Holding pays out 88% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Differ Group Holding Company Limited's Growth Numbers

Differ Group Holding Company Limited has seen its earnings per share (EPS) increase by 8.3% a year over the past three years. It achieved revenue growth of 167% over the last year.

We like the look of the strong year-on-year improvement in revenue. With that in mind, the modestly improving EPS seems positive. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Differ Group Holding Company Limited Been A Good Investment?

We think that the total shareholder return of 145%, over three years, would leave most Differ Group Holding Company Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's overall performance, while not bad, could be better. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 5 warning signs (and 2 which are potentially serious) in Differ Group Holding we think you should know about.

Switching gears from Differ Group Holding, 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.

When trading stocks or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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