Here's What We Learned About The CEO Pay At F8 Enterprises (Holdings) Group Limited (HKG:8347)

Chi Fai Chan became the CEO of F8 Enterprises (Holdings) Group Limited (HKG:8347) in 2016, 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 assess whether F8 Enterprises (Holdings) Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for F8 Enterprises (Holdings) Group

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

At the time of writing, our data shows that F8 Enterprises (Holdings) Group Limited has a market capitalization of HK$199m, and reported total annual CEO compensation of HK$903k for the year to March 2020. Notably, that's an increase of 9.7% over the year before. Notably, the salary which is HK$885.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.2m. So it looks like F8 Enterprises (Holdings) Group compensates Chi Fai Chan in line with the median for the industry.

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. F8 Enterprises (Holdings) Group 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 dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at F8 Enterprises (Holdings) Group Limited's Growth Numbers

F8 Enterprises (Holdings) Group Limited has seen its earnings per share (EPS) increase by 47% a year over the past three years. It achieved revenue growth of 49% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 F8 Enterprises (Holdings) Group Limited Been A Good Investment?

Since shareholders would have lost about 49% over three years, some F8 Enterprises (Holdings) Group Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

F8 Enterprises (Holdings) Group pays its CEO a majority of compensation through a salary. As previously discussed, Chi Fai is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. However, EPS growth is positive over the same time frame. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for F8 Enterprises (Holdings) Group (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: F8 Enterprises (Holdings) Group 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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