How Should Investors Feel About Vitasoy International Holdings' (HKG:345) CEO Remuneration?

Roberto Guidetti has been the CEO of Vitasoy International Holdings Limited (HKG:345) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Vitasoy International Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Vitasoy International Holdings

How Does Total Compensation For Roberto Guidetti Compare With Other Companies In The Industry?

At the time of writing, our data shows that Vitasoy International Holdings Limited has a market capitalization of HK$34b, and reported total annual CEO compensation of HK$18m for the year to March 2020. That's just a smallish increase of 6.3% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$7.4m.

On comparing similar companies from the same industry with market caps ranging from HK$16b to HK$50b, we found that the median CEO total compensation was HK$6.9m. Hence, we can conclude that Roberto Guidetti is remunerated higher than the industry median. Moreover, Roberto Guidetti also holds HK$151m worth of Vitasoy International Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 83% of total compensation represents salary, while the remainder of 17% is other remuneration. Vitasoy International Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Vitasoy International Holdings Limited's Growth

Over the past three years, Vitasoy International Holdings Limited has seen its earnings per share (EPS) grow by 6.3% per year. In the last year, its revenue is down 10%.

We would prefer it if there was revenue growth, but the modest EPSgrowth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Vitasoy International Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 66% over three years, Vitasoy International Holdings Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we touched on above, Vitasoy International Holdings Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Still, shareholder returns for the company are very impressive for the last three years. On the other hand, EPS growth — over the same period — is not as impressive. We'd ideally want to see higher EPS growth, but CEO compensation seems to be within reason, given high shareholder returns.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Vitasoy International Holdings that you should be aware of before investing.

Switching gears from Vitasoy International 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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