Key Things To Understand About K & P International Holdings' (HKG:675) CEO Pay Cheque

The CEO of K & P International Holdings Limited (HKG:675) is Pei Lai, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for K & P International Holdings

Comparing K & P International Holdings Limited's CEO Compensation With the industry

Our data indicates that K & P International Holdings Limited has a market capitalization of HK$176m, and total annual CEO compensation was reported as HK$3.6m for the year to December 2019. That's a notable increase of 9.7% on last year. Notably, the salary which is HK$2.69m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. Accordingly, our analysis reveals that K & P International Holdings Limited pays Pei Lai north of the industry median. Furthermore, Pei Lai directly owns HK$80m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 76% of total compensation represents salary and 24% is other remuneration. There isn't a significant difference between K & P International Holdings and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

K & P International Holdings Limited's Growth

K & P International Holdings Limited has seen its earnings per share (EPS) increase by 81% a year over the past three years. Its revenue is down 17% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has K & P International Holdings Limited Been A Good Investment?

Given the total shareholder loss of 36% over three years, many shareholders in K & P International Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, K & P International Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, the EPS growth is certainly impressive, but it's disappointing to see negative shareholder returns over the same period. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for K & P International Holdings that investors should look into moving forward.

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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