How Is Chaoda Modern Agriculture (Holdings)'s (HKG:682) CEO Compensated?

Ho Kwok is the CEO of Chaoda Modern Agriculture (Holdings) Limited (HKG:682), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Chaoda Modern Agriculture (Holdings).

Check out our latest analysis for Chaoda Modern Agriculture (Holdings)

Comparing Chaoda Modern Agriculture (Holdings) Limited's CEO Compensation With the industry

According to our data, Chaoda Modern Agriculture (Holdings) Limited has a market capitalization of HK$250m, and paid its CEO total annual compensation worth CN¥755k over the year to June 2020. We note that's a decrease of 23% compared to last year. In particular, the salary of CN¥739.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.3m. This suggests that Ho Kwok is paid below the industry median. Furthermore, Ho Kwok directly owns HK$51m 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. Chaoda Modern Agriculture (Holdings) has gone down a largely traditional route, paying Ho Kwok a high salary, giving it preference over non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Chaoda Modern Agriculture (Holdings) Limited's Growth Numbers

Over the past three years, Chaoda Modern Agriculture (Holdings) Limited has seen its earnings per share (EPS) grow by 122% per year. It saw its revenue drop 12% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Chaoda Modern Agriculture (Holdings) Limited Been A Good Investment?

Since shareholders would have lost about 68% over three years, some Chaoda Modern Agriculture (Holdings) Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Chaoda Modern Agriculture (Holdings) pays its CEO a majority of compensation through a salary. As we noted earlier, Chaoda Modern Agriculture (Holdings) pays its CEO lower than the norm for similar-sized companies belonging to the same industry. However we must not forget that the EPS growth has been very strong over three years. It's tough to criticize CEO compensation when the per-share EPS movement is positive. But we believe shareholders would want to see healthier returns before the CEO gets a raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Chaoda Modern Agriculture (Holdings) that investors should think about before committing capital to this stock.

Important note: Chaoda Modern Agriculture (Holdings) 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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