A Quick Analysis On Road King Infrastructure's (HKG:1098) CEO Compensation

Yuk Bing Ko is the CEO of Road King Infrastructure Limited (HKG:1098), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Road King Infrastructure pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Road King Infrastructure

Comparing Road King Infrastructure Limited's CEO Compensation With the industry

According to our data, Road King Infrastructure Limited has a market capitalization of HK$7.5b, and paid its CEO total annual compensation worth HK$53m over the year to December 2019. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$8.2m.

On examining similar-sized companies in the industry with market capitalizations between HK$3.1b and HK$12b, we discovered that the median CEO total compensation of that group was HK$5.0m. This suggests that Yuk Bing Ko is paid more than the median for the industry.

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. In Road King Infrastructure's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Road King Infrastructure Limited's Growth

Road King Infrastructure Limited has seen its earnings per share (EPS) increase by 25% a year over the past three years. Its revenue is down 2.8% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Road King Infrastructure Limited Been A Good Investment?

Road King Infrastructure Limited has not done too badly by shareholders, with a total return of 0.1%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As previously discussed, Yuk Bing is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth over three years is certainly impressive. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't say CEO compensation problematic.

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. That's why we did our research, and identified 3 warning signs for Road King Infrastructure (of which 2 are potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Important note: Road King Infrastructure is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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