Here's What We Learned About The CEO Pay At International Housewares Retail Company Limited (HKG:1373)

This article will reflect on the compensation paid to Lai Ha Ngai who has served as CEO of International Housewares Retail Company Limited (HKG:1373) since 2018. This analysis will also assess whether International Housewares Retail pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for International Housewares Retail

Comparing International Housewares Retail Company Limited's CEO Compensation With the industry

At the time of writing, our data shows that International Housewares Retail Company Limited has a market capitalization of HK$1.9b, and reported total annual CEO compensation of HK$3.2m for the year to April 2020. That's a fairly small increase of 6.3% over the previous year. In particular, the salary of HK$3.06m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between HK$776m and HK$3.1b, we discovered that the median CEO total compensation of that group was HK$3.0m. So it looks like International Housewares Retail compensates Lai Ha Ngai in line with the median for the industry. What's more, Lai Ha Ngai holds HK$85m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 91% of total compensation out of all the companies we analyzed, while other remuneration made up 9.2% of the pie. International Housewares Retail has gone down a largely traditional route, paying Lai Ha Ngai a high salary, giving it preference over 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.

International Housewares Retail Company Limited's Growth

Over the past three years, International Housewares Retail Company Limited has seen its earnings per share (EPS) grow by 43% per year. It achieved revenue growth of 11% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 International Housewares Retail Company Limited Been A Good Investment?

Most shareholders would probably be pleased with International Housewares Retail Company Limited for providing a total return of 122% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

International Housewares Retail pays its CEO a majority of compensation through a salary. As we noted earlier, International Housewares Retail pays its CEO in line with similar-sized companies belonging to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. Indeed, many might consider that Lai Ha is compensated rather modestly, given the solid company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

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 International Housewares Retail that you should be aware of before investing.

Important note: International Housewares Retail 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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