Richard Lam became the CEO of EverChina Int'l Holdings Company Limited (HKG:202) in 2009, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether EverChina Int'l Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for EverChina Int'l Holdings
Comparing EverChina Int'l Holdings Company Limited's CEO Compensation With the industry
Our data indicates that EverChina Int'l Holdings Company Limited has a market capitalization of HK$1.3b, and total annual CEO compensation was reported as HK$5.3m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is HK$4.53m, represents most of the total compensation being paid.
On comparing similar companies from the same industry with market caps ranging from HK$775m to HK$3.1b, we found that the median CEO total compensation was HK$3.4m. Accordingly, our analysis reveals that EverChina Int'l Holdings Company Limited pays Richard Lam north of the industry median. Moreover, Richard Lam also holds HK$1.4m worth of EverChina Int'l Holdings stock directly under their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$4.5m | HK$4.7m | 86% |
| Other | HK$720k | HK$720k | 14% |
| Total Compensation | HK$5.3m | HK$5.4m | 100% |
On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. EverChina Int'l Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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 EverChina Int'l Holdings Company Limited's Growth Numbers
EverChina Int'l Holdings Company Limited's earnings per share (EPS) grew 34% per year over the last three years. It saw its revenue drop 18% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has EverChina Int'l Holdings Company Limited Been A Good Investment?
EverChina Int'l Holdings Company Limited has generated a total shareholder return of 2.8% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
As we noted earlier, EverChina Int'l Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven't been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't say CEO compensation problematic.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for EverChina Int'l Holdings that investors should look into moving forward.
Switching gears from EverChina Int'l Holdings, 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:202
EverChina Int'l Holdings
An investment holding company, primarily engages in the property investment and hotel operations in the People’s Republic of China and Bolivia.
Adequate balance sheet minimal.
