This article will reflect on the compensation paid to Thomas Chan who has served as CEO of Wang On Group Limited (HKG:1222) since 2005. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Wang On Group.
Check out our latest analysis for Wang On Group
How Does Total Compensation For Thomas Chan Compare With Other Companies In The Industry?
Our data indicates that Wang On Group Limited has a market capitalization of HK$893m, and total annual CEO compensation was reported as HK$5.7m for the year to March 2020. Notably, that's a decrease of 21% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$2.6m.
In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.7m. Accordingly, our analysis reveals that Wang On Group Limited pays Thomas Chan north of the industry median.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$2.6m | HK$2.8m | 45% |
| Other | HK$3.1m | HK$4.4m | 55% |
| Total Compensation | HK$5.7m | HK$7.1m | 100% |
On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. Wang On Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Wang On Group Limited's Growth Numbers
Wang On Group Limited has reduced its earnings per share by 58% a year over the last three years. In the last year, its revenue is down 50%.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. 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 Wang On Group Limited Been A Good Investment?
Since shareholders would have lost about 47% over three years, some Wang On Group Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we touched on above, Wang On Group 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. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. What's equally worrying is that the company isn't growing by our analysis. 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. That's why we did our research, and identified 3 warning signs for Wang On Group (of which 2 are a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Wang On Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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Access Free AnalysisThis 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:1222
Wang On Group
An investment holding company, primarily engages in the property development and investment activities in Hong Kong, Mainland China, Macau, and internationally.
Mediocre balance sheet low.
