A Quick Analysis On Asia Standard International Group's (HKG:129) CEO Salary

Richard Poon has been the CEO of Asia Standard International Group Limited (HKG:129) since 1984, and this article will examine the executive's compensation 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.

See our latest analysis for Asia Standard International Group

How Does Total Compensation For Richard Poon Compare With Other Companies In The Industry?

According to our data, Asia Standard International Group Limited has a market capitalization of HK$1.2b, and paid its CEO total annual compensation worth HK$25m over the year to March 2020. That's a modest increase of 7.3% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$1.3m.

For comparison, other companies in the same industry with market capitalizations ranging between HK$775m and HK$3.1b had a median total CEO compensation of HK$3.4m. This suggests that Richard Poon is paid more than the median for the industry. Furthermore, Richard Poon directly owns HK$1.2m 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. It's interesting to note that Asia Standard International Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Asia Standard International Group Limited's Growth Numbers

Over the last three years, Asia Standard International Group Limited has shrunk its earnings per share by 20% per year. In the last year, its revenue is down 2.4%.

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 Asia Standard International Group Limited Been A Good Investment?

Since shareholders would have lost about 54% over three years, some Asia Standard International Group Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Richard is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past 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. In our study, we found 4 warning signs for Asia Standard International Group you should be aware of, and 2 of them are potentially serious.

Important note: Asia Standard International Group 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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