What We Learned About Nissin Foods' (HKG:1475) CEO Compensation

The CEO of Nissin Foods Company Limited (HKG:1475) is Kiyotaka Ando, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Nissin Foods.

Check out our latest analysis for Nissin Foods

How Does Total Compensation For Kiyotaka Ando Compare With Other Companies In The Industry?

According to our data, Nissin Foods Company Limited has a market capitalization of HK$6.8b, and paid its CEO total annual compensation worth HK$5.4m over the year to December 2019. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$5.4m.

For comparison, other companies in the same industry with market capitalizations ranging between HK$3.1b and HK$12b had a median total CEO compensation of HK$1.7m. Hence, we can conclude that Kiyotaka Ando is remunerated higher than the industry median. Furthermore, Kiyotaka Ando directly owns HK$123m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 81% of total compensation out of all the companies we analyzed, while other remuneration made up 19% of the pie. At the company level, Nissin Foods pays Kiyotaka Ando solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Nissin Foods Company Limited's Growth

Over the past three years, Nissin Foods Company Limited has seen its earnings per share (EPS) grow by 19% per year. In the last year, its revenue is up 11%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Nissin Foods Company Limited Been A Good Investment?

Most shareholders would probably be pleased with Nissin Foods Company Limited for providing a total return of 103% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Nissin Foods rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Nissin Foods pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. And given most shareholders are probably very happy with recent returns, they might even think that Kiyotaka deserves a raise!

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Nissin Foods that investors should look into moving forward.

Important note: Nissin Foods 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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