Does CL Group (Holdings)'s (HKG:8098) CEO Salary Compare Well With The Performance Of The Company?

Kin Chung Kwok is the CEO of CL Group (Holdings) Limited (HKG:8098), and in this article, we analyze the executive's compensation package 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 CL Group (Holdings).

View our latest analysis for CL Group (Holdings)

Comparing CL Group (Holdings) Limited's CEO Compensation With the industry

At the time of writing, our data shows that CL Group (Holdings) Limited has a market capitalization of HK$156m, and reported total annual CEO compensation of HK$1.1m for the year to March 2020. That's a slightly lower by 5.9% over the previous year. We note that the salary portion, which stands at HK$1.08m 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. So it looks like CL Group (Holdings) compensates Kin Chung Kwok in line with the median for the industry.

On an industry level, roughly 86% of total compensation represents salary and 14% is other remuneration. Investors will find it interesting that CL Group (Holdings) pays the bulk of its rewards through a traditional salary, instead of 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.

CL Group (Holdings) Limited's Growth

Over the past three years, CL Group (Holdings) Limited has seen its earnings per share (EPS) grow by 8.7% per year. In the last year, its revenue is up 5.0%.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. 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 CL Group (Holdings) Limited Been A Good Investment?

With a three year total loss of 31% for the shareholders, CL Group (Holdings) Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Kin Chung receives almost all of their compensation through a salary. As we touched on above, CL Group (Holdings) Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, CL Group (Holdings) is suffering from adverse shareholder returns and althoughEPS have grown over the past three years, they have not been extraordinary. CEO pay isn't exceptionally high, but considering poor performance, shareholders will likely hold off support for a raise until results improve.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for CL Group (Holdings) (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from CL Group (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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