What We Learned About Goldlion Holdings' (HKG:533) CEO Pay

Ricky Tsang became the CEO of Goldlion Holdings Limited (HKG:533) in 2005, and we think it's a good time to look at 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 Goldlion Holdings.

See our latest analysis for Goldlion Holdings

How Does Total Compensation For Ricky Tsang Compare With Other Companies In The Industry?

Our data indicates that Goldlion Holdings Limited has a market capitalization of HK$1.5b, and total annual CEO compensation was reported as HK$12m for the year to December 2019. That's a modest increase of 3.1% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$4.9m.

On examining similar-sized companies in the industry with market capitalizations between HK$775m and HK$3.1b, we discovered that the median CEO total compensation of that group was HK$3.2m. Accordingly, our analysis reveals that Goldlion Holdings Limited pays Ricky Tsang north of the industry median. What's more, Ricky Tsang holds HK$2.2m 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. Goldlion Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Goldlion Holdings Limited's Growth Numbers

Over the last three years, Goldlion Holdings Limited has shrunk its earnings per share by 16% per year. In the last year, its revenue is down 16%.

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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Goldlion Holdings Limited Been A Good Investment?

Given the total shareholder loss of 39% over three years, many shareholders in Goldlion Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Goldlion Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Goldlion Holdings you should be aware of, and 1 of them shouldn't be ignored.

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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