A Quick Analysis On Gold Peak Industries (Holdings)'s (HKG:40) CEO Salary
Victor Lo has been the CEO of Gold Peak Industries (Holdings) Limited (HKG:40) since 1990, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Gold Peak Industries (Holdings) pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Gold Peak Industries (Holdings)
Comparing Gold Peak Industries (Holdings) Limited's CEO Compensation With the industry
According to our data, Gold Peak Industries (Holdings) Limited has a market capitalization of HK$479m, and paid its CEO total annual compensation worth HK$11m over the year to March 2020. That's just a smallish increase of 4.8% on last year. We note that the salary portion, which stands at HK$8.47m 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$1.9m. Accordingly, our analysis reveals that Gold Peak Industries (Holdings) Limited pays Victor Lo north of the industry median. What's more, Victor Lo holds HK$119m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$8.5m | HK$8.5m | 74% |
| Other | HK$3.0m | HK$2.4m | 26% |
| Total Compensation | HK$11m | HK$11m | 100% |
Speaking on an industry level, nearly 78% of total compensation represents salary, while the remainder of 22% is other remuneration. There isn't a significant difference between Gold Peak Industries (Holdings) and the broader market, in terms of salary allocation in the overall compensation package. 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 Gold Peak Industries (Holdings) Limited's Growth Numbers
Over the last three years, Gold Peak Industries (Holdings) Limited has shrunk its earnings per share by 11% per year. In the last year, its revenue is down 7.2%.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Gold Peak Industries (Holdings) Limited Been A Good Investment?
Since shareholders would have lost about 24% over three years, some Gold Peak Industries (Holdings) Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As we touched on above, Gold Peak Industries (Holdings) 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.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in Gold Peak Industries (Holdings) we think you should know about.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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:40
Gold Peak Technology Group
An investment holding company, engages in the development, manufacture, marketing, and trading of batteries, audio, electronics, and acoustics products.
Good value low.
