James Oung is the CEO of Paladin Limited (HKG:495), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Paladin.
View our latest analysis for Paladin
How Does Total Compensation For James Oung Compare With Other Companies In The Industry?
Our data indicates that Paladin Limited has a market capitalization of HK$168m, and total annual CEO compensation was reported as HK$3.3m for the year to June 2020. We note that's a decrease of 28% compared to last year. We note that the salary portion, which stands at HK$1.87m constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.8m. This suggests that James Oung is paid more than the median for the industry. Moreover, James Oung also holds HK$63m worth of Paladin 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$1.9m | HK$1.9m | 57% |
| Other | HK$1.4m | HK$2.7m | 43% |
| Total Compensation | HK$3.3m | HK$4.6m | 100% |
On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Paladin pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Paladin Limited's Growth
Over the last three years, Paladin Limited has shrunk its earnings per share by 115% per year. It achieved revenue growth of 74% over the last year.
The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. 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. 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 Paladin Limited Been A Good Investment?
With a three year total loss of 52% for the shareholders, Paladin Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As we touched on above, Paladin Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. It concerns us that EPS growth for the company is negative, while share price gains did not materialize over the last three years. On a more positive note, the company has produced a more positive revenue growth more recently. Few would argue that it's wise for the company to pay any more, before returns improve.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Paladin you should be aware of, and 1 of them is a bit concerning.
Important note: Paladin 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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About SEHK:495
Paladin
An investment holding company, engages in the property investment, and research and development of high technology system and applications in Hong Kong, Finland, and internationally.
Low with imperfect balance sheet.
