How Much Does Cheuk Nang (Holdings)'s (HKG:131) CEO Make?

The CEO of Cheuk Nang (Holdings) Limited (HKG:131) is Cecil Chao, and this article examines the executive's compensation against the backdrop of overall company performance. 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 Cheuk Nang (Holdings)

How Does Total Compensation For Cecil Chao Compare With Other Companies In The Industry?

According to our data, Cheuk Nang (Holdings) Limited has a market capitalization of HK$2.0b, and paid its CEO total annual compensation worth HK$8.8m over the year to June 2020. We note that's a decrease of 12% compared to last year. Notably, the salary of HK$8.8m is the entirety of the CEO compensation.

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$3.2m. This suggests that Cecil Chao is paid more than the median for the industry. What's more, Cecil Chao holds HK$1.5b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Speaking on a company level, Cheuk Nang (Holdings) prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Cheuk Nang (Holdings) Limited's Growth

Cheuk Nang (Holdings) Limited has reduced its earnings per share by 55% a year over the last three years. In the last year, its revenue is up 172%.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Cheuk Nang (Holdings) Limited Been A Good Investment?

Since shareholders would have lost about 28% over three years, some Cheuk Nang (Holdings) Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

Cheuk Nang (Holdings) pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Cecil is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. At the same time, looking at EPS and total shareholder returns, it's tough to say Cheuk Nang (Holdings) is in a sound position, considering both metrics are down. On the bright side, at lease revenue growth seems to be marching northward. Suffice it to say, we don't think the CEO is underpaid!

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Cheuk Nang (Holdings) that you should be aware of before investing.

Important note: Cheuk Nang (Holdings) 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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