What Can We Make Of Mi Ming Mart Holdings' (HKG:8473) CEO Compensation?

This article will reflect on the compensation paid to Erica Yuen who has served as CEO of Mi Ming Mart Holdings Limited (HKG:8473) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Mi Ming Mart Holdings

How Does Total Compensation For Erica Yuen Compare With Other Companies In The Industry?

According to our data, Mi Ming Mart Holdings Limited has a market capitalization of HK$246m, and paid its CEO total annual compensation worth HK$2.1m over the year to March 2020. That's a slight decrease of 6.6% on the prior year. In particular, the salary of HK$1.95m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.1m. From this we gather that Erica Yuen is paid around the median for CEOs in the industry. Furthermore, Erica Yuen directly owns HK$132m worth of shares in the company, implying that they are deeply invested in the company's success.

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. There isn't a significant difference between Mi Ming Mart Holdings and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Mi Ming Mart Holdings Limited's Growth

Mi Ming Mart Holdings Limited has seen its earnings per share (EPS) increase by 30% a year over the past three years. It saw its revenue drop 6.1% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Mi Ming Mart Holdings Limited Been A Good Investment?

With a three year total loss of 11% for the shareholders, Mi Ming Mart Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Mi Ming Mart Holdings Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. At the same time, the company has logged negative shareholder returns over the last three years. But on the bright side, EPS growth is positive over the same period. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Mi Ming Mart Holdings that investors should think about before committing capital to this stock.

Important note: Mi Ming Mart Holdings 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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