How Does Veeko International Holdings' (HKG:1173) CEO Pay Compare With Company Performance?

The CEO of Veeko International Holdings Limited (HKG:1173) is Yuk Sum Lam, and this article examines 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.

Check out our latest analysis for Veeko International Holdings

Comparing Veeko International Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that Veeko International Holdings Limited has a market capitalization of HK$116m, and reported total annual CEO compensation of HK$622k for the year to March 2020. Notably, that's a decrease of 10.0% over the year before. In particular, the salary of HK$594.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.1m. Accordingly, Veeko International Holdings pays its CEO under the industry median. Moreover, Yuk Sum Lam also holds HK$13m worth of Veeko International Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 90% of total compensation represents salary, while the remainder of 9.6% is other remuneration. Veeko International Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Veeko International Holdings Limited's Growth Numbers

Over the last three years, Veeko International Holdings Limited has shrunk its earnings per share by 83% per year. It saw its revenue drop 53% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Veeko International Holdings Limited Been A Good Investment?

Given the total shareholder loss of 68% over three years, many shareholders in Veeko International Holdings Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Yuk Sum receives almost all of their compensation through a salary. As we noted earlier, Veeko International Holdings pays its CEO lower than the norm for similar-sized companies belonging to the same industry. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Veeko International Holdings (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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