Shareholders Will Probably Not Have Any Issues With Sino Splendid Holdings Limited's (HKG:8006) CEO Compensation

Shareholders may be wondering what CEO Chi Wa Chow plans to do to improve the less than great performance at Sino Splendid Holdings Limited (HKG:8006) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 30 June 2021. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We think CEO compensation looks appropriate given the data we have put together.

See our latest analysis for Sino Splendid Holdings

How Does Total Compensation For Chi Wa Chow Compare With Other Companies In The Industry?

Our data indicates that Sino Splendid Holdings Limited has a market capitalization of HK$40m, and total annual CEO compensation was reported as HK$1.6m for the year to December 2020. Notably, that's an increase of 88% over the year before. We note that the salary portion, which stands at HK$1.36m constitutes the majority of total compensation received by 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, Sino Splendid Holdings pays its CEO under the industry median.

Component	2020	2019	Proportion (2020)
Salary	HK$1.4m	HK$720k	84%
Other	HK$254k	HK$138k	16%
Total Compensation	HK$1.6m	HK$858k	100%

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. Although there is a difference in how total compensation is set, Sino Splendid Holdings more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Sino Splendid Holdings Limited's Growth

Over the past three years, Sino Splendid Holdings Limited has seen its earnings per share (EPS) grow by 79% per year. Its revenue is down 56% over the previous 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Sino Splendid Holdings Limited Been A Good Investment?

With a total shareholder return of -54% over three years, Sino Splendid Holdings Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders have earned a negative share price return is certainly disconcerting. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Sino Splendid Holdings you should be aware of, and 2 of them are potentially serious.

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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