What We Learned About Vincent Medical Holdings' (HKG:1612) CEO Compensation

Ki Cheung To is the CEO of Vincent Medical Holdings Limited (HKG:1612), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Vincent Medical Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Vincent Medical Holdings

How Does Total Compensation For Ki Cheung To Compare With Other Companies In The Industry?

According to our data, Vincent Medical Holdings Limited has a market capitalization of HK$993m, and paid its CEO total annual compensation worth HK$1.8m over the year to December 2019. Notably, that's an increase of 15% over the year before. We note that the salary portion, which stands at HK$1.36m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.9m. This suggests that Ki Cheung To is paid below the industry median. Moreover, Ki Cheung To also holds HK$27m worth of Vincent Medical 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 65% of total compensation out of all the companies we analyzed, while other remuneration made up 35% of the pie. It's interesting to note that Vincent Medical Holdings pays out a greater portion of remuneration through salary, compared to the industry. 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 Vincent Medical Holdings Limited's Growth Numbers

Over the past three years, Vincent Medical Holdings Limited has seen its earnings per share (EPS) grow by 45% per year. In the last year, its revenue is up 49%.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Vincent Medical Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with Vincent Medical Holdings Limited for providing a total return of 136% over three years. 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.

In Summary...

As previously discussed, Ki Cheung is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. And given most shareholders are probably very happy with recent shareholder returns, they might even think Ki Cheung deserves a raise!

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Vincent Medical Holdings that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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