Here's What We Learned About The CEO Pay At ITE (Holdings) Limited (HKG:8092)

Vincent Lau is the CEO of ITE (Holdings) Limited (HKG:8092), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether ITE (Holdings) pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for ITE (Holdings)

Comparing ITE (Holdings) Limited's CEO Compensation With the industry

According to our data, ITE (Holdings) Limited has a market capitalization of HK$25m, and paid its CEO total annual compensation worth HK$1.9m over the year to March 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of HK$1.66m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. So it looks like ITE (Holdings) compensates Vincent Lau in line with the median for the industry.

Talking in terms of the industry, salary represented approximately 60% of total compensation out of all the companies we analyzed, while other remuneration made up 40% of the pie. ITE (Holdings) is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at ITE (Holdings) Limited's Growth Numbers

ITE (Holdings) Limited's earnings per share (EPS) grew 32% per year over the last three years. Its revenue is up 24% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. 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 ITE (Holdings) Limited Been A Good Investment?

Since shareholders would have lost about 74% over three years, some ITE (Holdings) Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, ITE (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. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But on the bright side, EPS growth is positive over the same period. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for ITE (Holdings) that investors should think about before committing capital to this stock.

Important note: ITE (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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