How Does Golden Wheel Tiandi Holdings' (HKG:1232) CEO Pay Compare With Company Performance?

The CEO of Golden Wheel Tiandi Holdings Company Limited (HKG:1232) is Kam Fai Wong, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Golden Wheel Tiandi Holdings.

View our latest analysis for Golden Wheel Tiandi Holdings

How Does Total Compensation For Kam Fai Wong Compare With Other Companies In The Industry?

Our data indicates that Golden Wheel Tiandi Holdings Company Limited has a market capitalization of HK$991m, and total annual CEO compensation was reported as CN¥5.7m for the year to December 2019. That's a notable decrease of 14% on last year. We note that the salary portion, which stands at CN¥3.75m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.4m. Hence, we can conclude that Kam Fai Wong is remunerated higher than the industry median. Furthermore, Kam Fai Wong directly owns HK$6.3m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Golden Wheel Tiandi Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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 Golden Wheel Tiandi Holdings Company Limited's Growth Numbers

Over the last three years, Golden Wheel Tiandi Holdings Company Limited has shrunk its earnings per share by 46% per year. In the last year, its revenue is up 28%.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Golden Wheel Tiandi Holdings Company Limited Been A Good Investment?

Since shareholders would have lost about 14% over three years, some Golden Wheel Tiandi Holdings Company 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, Golden Wheel Tiandi Holdings Company 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. It concerns us that EPS growth for the company is negative, while share price gains did not materialize over the last three years. On the bright side, at lease revenue growth seems to be marching northward. Few would argue that it's wise for the company to pay any more, before returns improve.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Golden Wheel Tiandi Holdings (1 is a bit concerning!) that you should be aware of before investing here.

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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