What Can We Conclude About Hong Kong Economic Times Holdings' (HKG:423) CEO Pay?

Salome See is the CEO of Hong Kong Economic Times Holdings Limited (HKG:423), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. 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 Hong Kong Economic Times Holdings

How Does Total Compensation For Salome See Compare With Other Companies In The Industry?

Our data indicates that Hong Kong Economic Times Holdings Limited has a market capitalization of HK$440m, and total annual CEO compensation was reported as HK$3.8m for the year to March 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of HK$3.35m, 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. Accordingly, our analysis reveals that Hong Kong Economic Times Holdings Limited pays Salome See north of the industry median.

Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. Although there is a difference in how total compensation is set, Hong Kong Economic Times Holdings more or less reflects the market in terms of setting the salary. 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 Hong Kong Economic Times Holdings Limited's Growth Numbers

Over the last three years, Hong Kong Economic Times Holdings Limited has shrunk its earnings per share by 11% per year. It saw its revenue drop 19% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Hong Kong Economic Times Holdings Limited Been A Good Investment?

Since shareholders would have lost about 19% over three years, some Hong Kong Economic Times Holdings Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, Hong Kong Economic Times 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. This doesn't look good against shareholder returns, which have been negative for the past three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

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. We identified 3 warning signs for Hong Kong Economic Times Holdings (1 can't be ignored!) that you should be aware of before investing here.

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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