A Quick Analysis On K. Wah International Holdings' (HKG:173) CEO Salary

Che-Woo Lui is the CEO of K. Wah International Holdings Limited (HKG:173), 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 K. Wah International Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for K. Wah International Holdings

How Does Total Compensation For Che-Woo Lui Compare With Other Companies In The Industry?

Our data indicates that K. Wah International Holdings Limited has a market capitalization of HK$12b, and total annual CEO compensation was reported as HK$20m for the year to December 2019. That's a slightly lower by 5.1% over the previous year. In particular, the salary of HK$13.6m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between HK$7.8b and HK$25b, we discovered that the median CEO total compensation of that group was HK$5.9m. Hence, we can conclude that Che-Woo Lui is remunerated higher than the industry median. What's more, Che-Woo Lui holds HK$6.1b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. There isn't a significant difference between K. Wah International Holdings and the broader market, in terms of salary allocation in the overall compensation package. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

K. Wah International Holdings Limited's Growth

K. Wah International Holdings Limited's earnings per share (EPS) grew 5.4% per year over the last three years. It saw its revenue drop 8.5% over the last year.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has K. Wah International Holdings Limited Been A Good Investment?

K. Wah International Holdings Limited has not done too badly by shareholders, with a total return of 2.7%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

As previously discussed, Che-Woo is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, EPS growth is not moving in the right direction, and the returns to shareholders could have been better, over the last three years. So while shareholders might not be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before thinking a bump in pay is in order.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for K. Wah International Holdings (1 makes us a bit uncomfortable!) 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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