Shareholders may be wondering what CEO Tin Shing Chung plans to do to improve the less than great performance at Keen Ocean International Holding Limited (HKG:8070) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 07 June 2021. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.
How Does Total Compensation For Tin Shing Chung Compare With Other Companies In The Industry?
According to our data, Keen Ocean International Holding Limited has a market capitalization of HK$40m, and paid its CEO total annual compensation worth HK$538k over the year to December 2020. There was no change in the compensation compared to last year. We note that the salary portion, which stands at HK$520.0k constitutes the majority of total compensation received by 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$2.0m. This suggests that Tin Shing Chung is paid below the industry median. What's more, Tin Shing Chung holds HK$2.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 76% of total compensation represents salary and 24% is other remuneration. Keen Ocean International Holding pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Keen Ocean International Holding Limited's Growth
Keen Ocean International Holding Limited's earnings per share (EPS) grew 93% per year over the last three years. Its revenue is up 29% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast 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 Keen Ocean International Holding Limited Been A Good Investment?
Few Keen Ocean International Holding Limited shareholders would feel satisfied with the return of -68% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
Keen Ocean International Holding pays its CEO a majority of compensation through a salary. The loss to shareholders over the past three years is certainly concerning. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Keen Ocean International Holding you should be aware of, and 2 of them are 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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