Ping Hou has been the CEO of Goldpac Group Limited (HKG:3315) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Goldpac Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Goldpac Group
Comparing Goldpac Group Limited's CEO Compensation With the industry
Our data indicates that Goldpac Group Limited has a market capitalization of HK$1.2b, and total annual CEO compensation was reported as CN„4.7m for the year to December 2019. We note that's a decrease of 10% compared to last year. Notably, the salary which is CN„2.44m, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations ranging from HK$775m to HK$3.1b, the reported median CEO total compensation was CN„1.0m. Accordingly, our analysis reveals that Goldpac Group Limited pays Ping Hou north of the industry median. What's more, Ping Hou holds HK$18m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CN„2.4m | CN„2.4m | 52% |
| Other | CN„2.3m | CN„2.9m | 48% |
| Total Compensation | CN„4.7m | CN„5.2m | 100% |
Talking in terms of the industry, salary represented approximately 83% of total compensation out of all the companies we analyzed, while other remuneration made up 17% of the pie. In Goldpac Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Goldpac Group Limited's Growth Numbers
Goldpac Group Limited has reduced its earnings per share by 3.3% a year over the last three years. Its revenue is down 8.1% over the previous year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Goldpac Group Limited Been A Good Investment?
Given the total shareholder loss of 4.6% over three years, many shareholders in Goldpac Group Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, Goldpac Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Goldpac Group you should be aware of, and 1 of them is potentially serious.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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About SEHK:3315
Goldpac Group
An investment holding company, provides embedded software and secure payment products for smart secure payment in the Mainland China and internationally.
Flawless balance sheet established dividend payer.
