A Quick Analysis On NOVA Group Holdings' (HKG:1360) CEO Compensation

This article will reflect on the compensation paid to Feng Xu who has served as CEO of NOVA Group Holdings Limited (HKG:1360) since 2018. This analysis will also assess whether NOVA Group Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for NOVA Group Holdings

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

Our data indicates that NOVA Group Holdings Limited has a market capitalization of HK$183m, and total annual CEO compensation was reported as HK$2.1m for the year to June 2020. Notably, that's a decrease of 66% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$523k.

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$2.6m. This suggests that NOVA Group Holdings remunerates its CEO largely in line with the industry average.

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. NOVA Group Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at NOVA Group Holdings Limited's Growth Numbers

NOVA Group Holdings Limited has seen its earnings per share (EPS) increase by 83% a year over the past three years. Its revenue is down 4.5% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 NOVA Group Holdings Limited Been A Good Investment?

With a three year total loss of 95% for the shareholders, NOVA Group Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, NOVA Group Holdings Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. However, EPS growth is positive over the same time frame. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 5 warning signs for NOVA Group Holdings you should be aware of, and 1 of them is potentially serious.

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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