How Does Takbo Group Holdings' (HKG:8436) CEO Pay Compare With Company Performance?

Naam Or became the CEO of Takbo Group Holdings Limited (HKG:8436) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Takbo Group Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Takbo Group Holdings

Comparing Takbo Group Holdings Limited's CEO Compensation With the industry

According to our data, Takbo Group Holdings Limited has a market capitalization of HK$104m, and paid its CEO total annual compensation worth HK$3.2m over the year to December 2019. We note that's an increase of 18% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$1.2m.

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$1.9m. Accordingly, our analysis reveals that Takbo Group Holdings Limited pays Naam Or north of the industry median.

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. It's interesting to note that Takbo Group Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Takbo Group Holdings Limited's Growth

Takbo Group Holdings Limited has seen its earnings per share (EPS) increase by 51% a year over the past three years. It saw its revenue drop 14% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Takbo Group Holdings Limited Been A Good Investment?

Since shareholders would have lost about 40% over three years, some Takbo Group Holdings Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we touched on above, Takbo Group 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. However, we must not forget that the EPS growth has been very strong, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for Takbo Group 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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