What Can We Conclude About Oriental Watch Holdings' (HKG:398) CEO Pay?

The CEO of Oriental Watch Holdings Limited (HKG:398) is Dennis Yeung, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Oriental Watch Holdings.

Check out our latest analysis for Oriental Watch Holdings

How Does Total Compensation For Dennis Yeung Compare With Other Companies In The Industry?

Our data indicates that Oriental Watch Holdings Limited has a market capitalization of HK$1.3b, and total annual CEO compensation was reported as HK$7.7m for the year to March 2020. That's a fairly small increase of 3.8% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$3.4m.

On comparing similar companies from the same industry with market caps ranging from HK$775m to HK$3.1b, we found that the median CEO total compensation was HK$3.2m. Hence, we can conclude that Dennis Yeung is remunerated higher than the industry median. What's more, Dennis Yeung holds HK$15m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 90% of total compensation represents salary and 9.6% is other remuneration. In Oriental Watch Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Oriental Watch Holdings Limited's Growth Numbers

Over the past three years, Oriental Watch Holdings Limited has seen its earnings per share (EPS) grow by 19% per year. Its revenue is up 5.0% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Oriental Watch Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 136% over three years, Oriental Watch Holdings Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

As previously discussed, Dennis is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, Oriental Watch Holdings has produced strong EPS growth and shareholder returns over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Dennis's performance creates value for the company.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Oriental Watch Holdings that investors should be aware of in a dynamic business environment.

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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