How Does Wharf (Holdings)'s (HKG:4) CEO Salary Compare to Peers?

Stephen Ng became the CEO of Wharf (Holdings) Limited (HKG:4) in 1989, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Wharf (Holdings)

How Does Total Compensation For Stephen Ng Compare With Other Companies In The Industry?

Our data indicates that Wharf (Holdings) Limited has a market capitalization of HK$56b, and total annual CEO compensation was reported as HK$20m for the year to December 2019. We note that's a decrease of 33% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$5.2m.

On examining similar-sized companies in the industry with market capitalizations between HK$31b and HK$93b, we discovered that the median CEO total compensation of that group was HK$6.0m. This suggests that Stephen Ng is paid more than the median for the industry. What's more, Stephen Ng holds HK$41m 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. It's interesting to note that Wharf (Holdings) 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.

Wharf (Holdings) Limited's Growth

Wharf (Holdings) Limited has reduced its earnings per share by 78% a year over the last three years. In the last year, its revenue is down 32%.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Wharf (Holdings) Limited Been A Good Investment?

Since shareholders would have lost about 21% over three years, some Wharf (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...

As previously discussed, Stephen 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. To make matters worse, EPS growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Wharf (Holdings) that investors should look into moving forward.

Switching gears from Wharf (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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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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