Abraham Wong is the CEO of Pokfulam Development Company Limited (HKG:225), and in this article, we analyze the executive's compensation package 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.
View our latest analysis for Pokfulam Development
Comparing Pokfulam Development Company Limited's CEO Compensation With the industry
According to our data, Pokfulam Development Company Limited has a market capitalization of HK$1.2b, and paid its CEO total annual compensation worth HK$2.4m over the year to September 2020. This means that the compensation hasn't changed much from last year. Notably, the salary which is HK$2.25m, 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$3.2m. This suggests that Pokfulam Development remunerates its CEO largely in line with the industry average. Moreover, Abraham Wong also holds HK$908m worth of Pokfulam Development stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$2.3m | HK$2.2m | 95% |
| Other | HK$110k | HK$110k | 5% |
| Total Compensation | HK$2.4m | HK$2.3m | 100% |
Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Pokfulam Development is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. 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.
A Look at Pokfulam Development Company Limited's Growth Numbers
Pokfulam Development Company Limited has reduced its earnings per share by 85% a year over the last three years. In the last year, its revenue changed by just 0.8%.
The decline in EPS is a bit concerning. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Pokfulam Development Company Limited Been A Good Investment?
Since shareholders would have lost about 36% over three years, some Pokfulam Development Company Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
Pokfulam Development pays its CEO a majority of compensation through a salary. As we touched on above, Pokfulam Development Company Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Pokfulam Development (1 can't be ignored!) that you should be aware of before investing here.
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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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About SEHK:225
Pokfulam Development
An investment holding company, invests in, develops, and manages real estate properties in Hong Kong.
Average dividend payer with mediocre balance sheet.
