Kin Chung Kwan became the CEO of Culturecom Holdings Limited (HKG:343) in 2008, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Culturecom Holdings
Comparing Culturecom Holdings Limited's CEO Compensation With the industry
Our data indicates that Culturecom Holdings Limited has a market capitalization of HK$138m, and total annual CEO compensation was reported as HK$863k for the year to March 2020. That is, the compensation was roughly the same as last year. In particular, the salary of HK$725.0k, makes up a huge portion of the total compensation being paid to 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$2.6m. That is to say, Kin Chung Kwan is paid under the industry median.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$725k | HK$725k | 84% |
| Other | HK$138k | HK$138k | 16% |
| Total Compensation | HK$863k | HK$863k | 100% |
Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. Our data reveals that Culturecom Holdings allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Culturecom Holdings Limited's Growth
Earnings per share at Culturecom Holdings Limited are much the same as they were three years ago, albeit with slightly higher. It achieved revenue growth of 346% over the last year.
It's great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn't shabby. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Culturecom Holdings Limited Been A Good Investment?
Since shareholders would have lost about 75% over three years, some Culturecom Holdings Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As previously discussed, Kin Chung is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. But then, EPS growth is lacking and so are the returns to shareholders. So while we don't think, Kin Chung is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out.
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 1 warning sign for Culturecom Holdings that investors should think about before committing capital to this stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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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About SEHK:343
Culturecom Holdings
An investment holding company, operates as a comic book publishers and media content provider in Hong Kong and the People’s Republic of China.
Excellent balance sheet very low.
