Our Take On Emperor Watch & Jewellery's (HKG:887) CEO Salary

The CEO of Emperor Watch & Jewellery Limited (HKG:887) is Cindy 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 Emperor Watch & Jewellery.

View our latest analysis for Emperor Watch & Jewellery

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

At the time of writing, our data shows that Emperor Watch & Jewellery Limited has a market capitalization of HK$705m, and reported total annual CEO compensation of HK$4.8m for the year to December 2019. That's a fairly small increase of 3.0% over the previous year. We note that the salary portion, which stands at HK$3.29m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.1m. This suggests that Cindy Yeung is paid more than the median for the industry.

Speaking on an industry level, nearly 90% of total compensation represents salary, while the remainder of 9.6% is other remuneration. Emperor Watch & Jewellery sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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.

A Look at Emperor Watch & Jewellery Limited's Growth Numbers

Over the last three years, Emperor Watch & Jewellery Limited has shrunk its earnings per share by 30% per year. Its revenue is down 43% over the previous year.

Overall this is not a very positive result for shareholders. 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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Emperor Watch & Jewellery Limited Been A Good Investment?

With a three year total loss of 70% for the shareholders, Emperor Watch & Jewellery Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Emperor Watch & Jewellery Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good against shareholder returns, which have been negative for the past three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Emperor Watch & Jewellery that investors should think about before committing capital to this stock.

Important note: Emperor Watch & Jewellery 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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