This article will reflect on the compensation paid to Dongfeng Huang who has served as CEO of Birmingham Sports Holdings Limited (HKG:2309) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Birmingham Sports Holdings
Comparing Birmingham Sports Holdings Limited's CEO Compensation With the industry
At the time of writing, our data shows that Birmingham Sports Holdings Limited has a market capitalization of HK$2.7b, and reported total annual CEO compensation of HK$2.7m for the year to June 2020. We note that's a decrease of 16% compared to last year. We note that the salary portion, which stands at HK$2.05m constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the same industry with market capitalizations ranging between HK$1.6b and HK$6.2b had a median total CEO compensation of HK$1.9m. This suggests that Dongfeng Huang is paid more than the median for the industry.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$2.0m | HK$2.0m | 77% |
| Other | HK$607k | HK$1.2m | 23% |
| Total Compensation | HK$2.7m | HK$3.2m | 100% |
Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. In Birmingham Sports Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Birmingham Sports Holdings Limited's Growth
Birmingham Sports Holdings Limited has seen its earnings per share (EPS) increase by 37% a year over the past three years. In the last year, its revenue is up 10.0%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Birmingham Sports Holdings Limited Been A Good Investment?
Since shareholders would have lost about 12% over three years, some Birmingham Sports Holdings Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we noted earlier, Birmingham Sports Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed with its EPS growth, but it's disappointing to see negative shareholder returns over the same period. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which can't be ignored) in Birmingham Sports Holdings we think you should know about.
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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