The Compensation For International Housewares Retail Company Limited's (HKG:1373) CEO Looks Deserved And Here's Why

The performance at International Housewares Retail Company Limited (HKG:1373) has been quite strong recently and CEO Lai Ha Ngai has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 23 September 2021. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for International Housewares Retail

How Does Total Compensation For Lai Ha Ngai Compare With Other Companies In The Industry?

Our data indicates that International Housewares Retail Company Limited has a market capitalization of HK$2.1b, and total annual CEO compensation was reported as HK$3.4m for the year to April 2021. That's a fairly small increase of 5.8% over the previous year. Notably, the salary which is HK$3.24m, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from HK$778m to HK$3.1b, we found that the median CEO total compensation 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$95m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	HK$3.2m	HK$3.1m	95%
Other	HK$159k	HK$159k	5%
Total Compensation	HK$3.4m	HK$3.2m	100%

On an industry level, roughly 88% of total compensation represents salary and 12% is other remuneration. International Housewares Retail 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.

International Housewares Retail Company Limited's Growth

International Housewares Retail Company Limited's earnings per share (EPS) grew 35% per year over the last three years. It achieved revenue growth of 5.9% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 88% 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.

To Conclude...

International Housewares Retail pays its CEO a majority of compensation through a salary. Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for International Housewares Retail that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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