Stock Analysis

What We Learned About China-Hongkong Photo Products Holdings' (HKG:1123) CEO Pay

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This article will reflect on the compensation paid to Stanley Sun who has served as CEO of China-Hongkong Photo Products Holdings Limited (HKG:1123) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for China-Hongkong Photo Products Holdings.

See our latest analysis for China-Hongkong Photo Products Holdings

How Does Total Compensation For Stanley Sun Compare With Other Companies In The Industry?

At the time of writing, our data shows that China-Hongkong Photo Products Holdings Limited has a market capitalization of HK$154m, and reported total annual CEO compensation of HK$2.4m for the year to March 2020. That's a notable decrease of 8.2% on last year. In particular, the salary of HK$1.89m, makes up a huge portion of the total compensation being paid to 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$1.5m. Hence, we can conclude that Stanley Sun is remunerated higher than the industry median.

Component20202019Proportion (2020)
Salary HK$1.9m HK$1.9m 78%
Other HK$538k HK$779k 22%
Total CompensationHK$2.4m HK$2.6m100%

Speaking on an industry level, nearly 93% of total compensation represents salary, while the remainder of 7.0% is other remuneration. It's interesting to note that China-Hongkong Photo Products Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

SEHK:1123 CEO Compensation December 28th 2020

China-Hongkong Photo Products Holdings Limited's Growth

Over the last three years, China-Hongkong Photo Products Holdings Limited has shrunk its earnings per share by 74% per year. In the last year, its revenue is down 10%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has China-Hongkong Photo Products Holdings Limited Been A Good Investment?

With a three year total loss of 68% for the shareholders, China-Hongkong Photo Products Holdings Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, China-Hongkong Photo Products Holdings 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. This doesn't look good against shareholder returns, which have been negative for the past three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for China-Hongkong Photo Products Holdings that investors should think about before committing capital to this stock.

Switching gears from China-Hongkong Photo Products 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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