Chung Po Chen has been the CEO of Wai Chi Holdings Company Limited (HKG:1305) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Wai Chi Holdings.
Comparing Wai Chi Holdings Company Limited's CEO Compensation With the industry
According to our data, Wai Chi Holdings Company Limited has a market capitalization of HK$93m, and paid its CEO total annual compensation worth HK$1.3m over the year to December 2019. That's mostly flat as compared to the prior year's compensation. In particular, the salary of HK$1.30m, makes up a huge portion of the total compensation being paid to 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$1.3m. So it looks like Wai Chi Holdings compensates Chung Po Chen in line with the median for the industry.
Speaking on an industry level, nearly 83% of total compensation represents salary, while the remainder of 17% is other remuneration. Investors will find it interesting that Wai Chi Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. 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 Wai Chi Holdings Company Limited's Growth Numbers
Wai Chi Holdings Company Limited's earnings per share (EPS) grew 23% per year over the last three years. Its revenue is up 11% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Wai Chi Holdings Company Limited Been A Good Investment?
With a three year total loss of 66% for the shareholders, Wai Chi Holdings Company Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
Wai Chi Holdings pays its CEO a majority of compensation through a salary. As we touched on above, Wai Chi Holdings Company 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. However, EPS growth is positive over the same time frame. 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.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Wai Chi Holdings (of which 2 are a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Wai Chi Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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Wai Chi Holdings
Wai Chi Holdings Company Limited, an investment holding company, manufactures and trades in light-emitting diode (LED) backlight and LED lighting products to business corporations and public utilities in the People’s Republic of China, Hong Kong, Taiwan, and internationally.
Excellent balance sheet with solid track record.