It Looks Like Gold Peak Industries (Holdings) Limited's (HKG:40) CEO May Expect Their Salary To Be Put Under The Microscope
Shareholders will probably not be too impressed with the underwhelming results at Gold Peak Industries (Holdings) Limited (HKG:40) recently. At the upcoming AGM on 22 March 2021, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.
Check out our latest analysis for Gold Peak Industries (Holdings)
How Does Total Compensation For Victor Lo Compare With Other Companies In The Industry?
At the time of writing, our data shows that Gold Peak Industries (Holdings) Limited has a market capitalization of HK$510m, and reported total annual CEO compensation of HK$11m for the year to March 2020. That's a fairly small increase of 4.8% over the previous year. In particular, the salary of HK$8.47m, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.9m. Hence, we can conclude that Victor Lo is remunerated higher than the industry median. What's more, Victor Lo holds HK$130m 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% |
On an industry level, around 78% of total compensation represents salary and 22% is other remuneration. Gold Peak Industries (Holdings) is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.
Gold Peak Industries (Holdings) Limited's Growth
Gold Peak Industries (Holdings) Limited has reduced its earnings per share by 11% a year over the last three years. It saw its revenue drop 7.2% over the last 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. 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 Gold Peak Industries (Holdings) Limited Been A Good Investment?
Given the total shareholder loss of 23% over three years, many shareholders in Gold Peak Industries (Holdings) Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business 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 is a bit concerning) 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 slight.
