What Did Want Want China Holdings' (HKG:151) CEO Take Home Last Year?

The CEO of Want Want China Holdings Limited (HKG:151) is Eng-Meng Tsai, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Want Want China Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Want Want China Holdings

Comparing Want Want China Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that Want Want China Holdings Limited has a market capitalization of HK$68b, and reported total annual CEO compensation of CN¥82m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥1.0m.

On examining similar-sized companies in the industry with market capitalizations between HK$31b and HK$93b, we discovered that the median CEO total compensation of that group was CN¥5.9m. This suggests that Eng-Meng Tsai is paid more than the median for the industry. Moreover, Eng-Meng Tsai also holds HK$35b worth of Want Want China Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

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. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Eng-Meng Tsai as compared to non-salary compensation over the one-year period examined. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Want Want China Holdings Limited's Growth

Want Want China Holdings Limited has seen its earnings per share (EPS) increase by 8.0% a year over the past three years. Its revenue is up 1.6% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. 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 Want Want China Holdings Limited Been A Good Investment?

Since shareholders would have lost about 3.0% over three years, some Want Want China Holdings 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...

Want Want China Holdings primarily uses non-salary benefits to reward its CEO. As previously discussed, Eng-Meng is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. The growth in the business has been uninspiring, but the shareholder returns for Want Want China Holdings have arguably been worse, over the last three years. This doesn't look good when you see that Eng-Meng is earning more than the industry median. Taking all this into account, it could be hard to get shareholder support for giving Eng-Meng a raise.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Want Want China Holdings that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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