How Does Hilong Holding's (HKG:1623) CEO Pay Compare With Company Performance?

Tao Wang has been the CEO of Hilong Holding Limited (HKG:1623) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Hilong Holding

How Does Total Compensation For Tao Wang Compare With Other Companies In The Industry?

At the time of writing, our data shows that Hilong Holding Limited has a market capitalization of HK$433m, and reported total annual CEO compensation of CN¥1.7m for the year to December 2019. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥730k.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.7m. From this we gather that Tao Wang is paid around the median for CEOs in the industry.

On an industry level, around 63% of total compensation represents salary and 37% is other remuneration. Hilong Holding pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Hilong Holding Limited's Growth Numbers

Hilong Holding Limited has reduced its earnings per share by 4.7% a year over the last three years. Its revenue is down 6.4% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Hilong Holding Limited Been A Good Investment?

With a three year total loss of 77% for the shareholders, Hilong Holding Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Hilong Holding 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. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

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 4 warning signs (and 2 which are concerning) in Hilong Holding we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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